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Technology Stocks : Oracle Corporation (ORCL)

ORCL 201.95

-1.5%

Nov 28 9:30 AM EST

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To: grogger who wrote (7012)	4/23/1998 11:23:00 PM
From: Ian	Read Replies (1) of 19080

I don't think you're lying, just mistaken. The following is from the dlj report of 3/13 ÿ ORACLE CORP. (ORCL: $27.688 )* 03/13/98 Solid 3Q98; Raising Estimates ÿÿEarnings Per Share Old New P/E Ratios ÿÿ(FY:May) 1999E $1.00 $1.12 24.7 ÿ 1998E 0.82 0.92 30.1 ÿ 1997A 0.84 ÿ 33.0 Rating: BUY Change: None 12-Mo. Target: $33-$35 Oracle reported solid 3Q98 (Feb) results of $1.75 billion in revenue (+27%) and $0.22 in EPS versus our estimates of $1.65 billion and $0.19 (also consensus). A lower share count in the quarter gave ORCL an extra penny in EPS, but results were still above consensus. The highlights were the following: 1) strong results in the Americas (up 43%) and Europe (up 21%) partially offset by weakness in Asia; (2) better than expected growth in database servers, up 13% versus our model of flat growth and consensus numbers of 0% to 10% growth; 3) applications grew 30%, slightly below our forecast of 39% and more recent expectations due to weakness in Europe and Asia; 4) operating margins were better than our forecast; and, 5) DSOs improved to 68 days versus the recent trend of the mid-to-high 70s. We are encouraged by the comeback in the third quarter for ORCL, and particularly with solid and consistent performance in the Americas. This could potentially bring margins back to the 1997 levels of 22%-23%, from just under 20% this year, and potentially drive earnings 25% in FY99. We are raising our FY98 revenue estimates to $7.1 billion from $6.63 billion, and our EPS estimates to $0.92 from $0.82. We are also raising our FY99 EPS estimates to $1.12 from $1.00, based on higher margin assumptions. We expect ORCL to see strength tomorrow, based on a better-than-expected quarter and improvement in the outlook. ÿ

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