Oracle Beats But Guidance Not Until Later (ORCL, IBM, SAP)

Oracle Corp. (ORCL-NASDAQ) has posted non-GAAP EPS of $0.37 and revenues of $5.8 Billion.  This compares to estimates of $0.35 on a non-GAAP basis on consolidated revenues of $5.615 Billion.  The company gave prior guidance of an interpreted $0.34 EPS and $5.4 Billion to $5.6 Billion revenues a quarter ago. 

THIS WAS YEAR-END: GAAP earnings per share were up 27% to $0.81. Fiscal year 2007 GAAP revenues were up 25% to $18.0 billion, while annual GAAP net income was up 26% to $4.3 billion. Total GAAP software revenues for the year were up 23% to $14.2 billion with GAAP database and middleware new license revenues up 16% and GAAP applications new license revenues up 32%. Annual GAAP services revenues were $3.8 billion, up 33% compared to the year ago period.  Fiscal year 2007 non-GAAP earnings per share were up 25% year over year to $1.01. Annual non-GAAP net income was up 25% to $5.3 billion compared to fiscal year 2006.

The company is claiming better growth over competition: Over the last twelve months Oracle’s application new software license revenues grew at a rate of 32% while SAP’s growth slowed to 10% in their most recent fiscal year.  Oracle CEO Larry Ellison: "Oracle’s unique database grid architecture has enabled us to take market share from IBM.  Gartner’s just published database research report confirms that Oracle’s database market share has now increased to 47% while IBM’s share declined to 21%. IBM has been unable to match the performance and reliability of Oracle database grids."

Here is how this lines up with the rest of our earnings preview this morning.  Unfortunately, Larry Ellison Inc. & Co. did not offer any guidance, so the street has to wait for the conference call guidance before throwing a party or calling a top.  The initial reaction has the stock down about 1% to $18.94, and that is after a 1.6% drop to $19.16 today in normal trading.

Jon C. Ogg
June 26, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.