Monday June 14, 6:39 pm Eastern Time
Oracle earnings to be in line, analysts say
PALO ALTO, Calif., June 14 (Reuters) - Oracle Corp. will likely report fourth-quarter earnings on Tuesday that are in line with estimates, analysts said, but added the rest of 1999 may be tough for the No. 1 database software company.
Oracle (Nasdaq:ORCL - news) and other so-called enterprise software companies are likely to continue to be hurt by a slowdown in sales as large companies that already have immunized themselves against the Year 2000 computer glitch wait until next year before making new purchases.
''I'm calling for a mixed bag in the quarter with pockets of strength that will encourage the bulls, but will have ample worries to fuel the bears,'' said Robert Austrian, an analyst at Banc of America Securities, in San Francisco. ''You're going to get a report card where the beauty or the beast is in the eyes of the beholder.''
Analysts surveyed by First Call Corp. -- which tracks company results -- expect the Redwood Shores, Calif., firm to have per-share earnings of 32 cents. Estimates range from 29 cents to 35 cents.
Oracle stock closed up $1.125 at $26.4375 in trading of 17.2 million shares on Monday, making it the second-most actively traded issue on Nasdaq.
Technology stocks, particularly Internet issues, got hit hard on Monday as investors continued to rotate money out of that sector into less volatile ones.
Austrian expects Oracle to post revenues in the fourth quarter ended May 31 of $2.7 billion and to have per-share earnings of 31 cents.
In recent quarters, Oracle has delivered uneven results, which lead to extreme volatility in the company's stock price, analysts noted.
For example, on March 11, while Oracle reported that its third-quarter profits rose 36 percent to $294.4 million, or 20 cents a share, revenue fell short of expectations. That sent its stock tumbling more than 20 percent the next day.
For investors to bid up the stock, analysts said, the company needs to smooth out its unpredictable earnings and deliver constant results.
''The second half of this year just remains pretty uncertain,'' Austrian said. Oracle's services business now accounts for about 60 percent of total revenue and any big swing in that business drops straight to the bottom line.
In the year-ago quarter, Oracle had net income of $403 million, or 41 cents a share, on revenue of $2.7 billion.
Those results do not take into account a three-for-two stock split on Feb. 26 of this year.
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