| | Oracle Raises Outlook For Earnings, Sales...
By VAUHINI VARA
The Wall St Journal
June 15, 2006 6:16 p.m.
Oracle Corp. preannounced stronger-than-expected fourth-quarter earnings and revenue, as growth across its businesses prompted a rare upwards earnings revision for the software maker, which has been under scrutiny since an acquisition binge last year.
Oracle, Redwood Shores, Calif., boosted its earnings prediction for the quarter ended May 31 to 24 cents a share, up 20% from 20 cents a share in the year-ago quarter. The company had previously predicted earnings of 21 cents a share to 23 cents a share.
Oracle also said it expects its revenue totaled $4.85 billion, up 25% from $3.88 billion a year ago, exceeding previous guidance of 13% to 17% growth.
The news surprised Wall Street, which has expressed skepticism about Oracle's ability to meld companies such as PeopleSoft Inc., Siebel Systems Inc. and others from an acquisition spree last year. Investors are also worried about recent slow growth in the company's core business of selling database software, which acts as a virtual filing cabinet for corporate data.
Bruce Richardson, an analyst at AMR Research called the preannouncement "unbelievable." He said he expects it to "put a lot of pressure" on SAP AG, Oracle's biggest rival.
In after-hours trading, Oracle's shares rose 85 cents, or 6.2%, to $14.55. At the market's 4 p.m. close, the company's stock closed at $13.70.
Oracle declined to comment on the earnings revision, citing a quiet period ahead of its official announcement next Thursday. A spokesman said the company hasn't preannounced earnings "in recent memory" but didn't immediately elaborate.
Oracle said it expects to post strong growth in both its core database business and its newly expanded business of selling application software, which interacts with database software to automate tasks in areas like human resources and customer service.
The company predicts sales of new software licenses grew 32% to $2.12 billion, exceeding the company's previous guidance of 8% to 18% growth.
Oracle also projected that sales of new licenses for "database technology" grew 18%. That includes sales of database software as well as "middleware," which allows users to access the underlying database. The company also said it expects to report that applications sales increased 83%. Without the recent acquisitions of Siebel and Retek Inc., a maker of software for retailers, applications license revenues, increased 56%. That number includes sales of PeopleSoft software.
Write to Vauhini Vara at vauhini.vara@wsj.com |
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