Wednesday November 10, 12:24 pm Eastern Time
S&P ups Oracle Corp snr unsecured
debt
(Press release provided by Standard & Poor's)
NEW YORK, Nov 10 - Standard & Poor's today raised its corporate credit and senior
unsecured debt ratings for Oracle Corp. to single-'A'-minus from triple-'B'-plus.
The senior unsecured shelf debt was also raised to preliminary single-'A'-minus from
preliminary triple-'B'-plus.
The current outlook is stable.
The upgrade on Redwood City, Calif.-based Oracle reflects its track record of very strong
levels of earnings and cash flow protection, and a moderate capital structure.
The company is a leading independent developer and marketer of relational database
management software (RDBMS), and application development tools and consulting
services.
For the year ending May 31, 1998, revenues grew 24% to $8.8 billion and net income was
$1.3 billion.
Near-term prospects remain strong following a product refresh, a focus on fast growing
Internet based services, and Oracle's ability to leverage its technology and large installed
software base to expand existing customer relationships.
Oracle's strong position in its core markets and ample financial flexibility are expected to
provide downside protection, despite rapid technology transitions, a slowdown in certain
end-markets, and aggressive competitive conditions.
Oracle's strong cash-generating ability-free operating cash flow has averaged about $850
million over the past five years-in conjunction with a cash position of about $2.7 billion (as
of August 31, 1999), provides strong financial flexibility, while permitting selective
acquisitions and ongoing share repurchases and capital investments.
The company's R&D expenditures-about 10% of sales -should help sustain Oracle's
leadership in an evolving industry through the timely development of new products.
OUTLOOK: STABLE
Management has a growth strategy that includes new products and markets, strategic
alliances, and acquisitions.
Even with a somewhat more aggressive financial posture, the company should still be able
to maintain a moderate capital structure and strong levels of earnings and cash flow
protection, Standard & Poor's said. |
