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Technology Stocks : Oracle Corporation (ORCL) -- Ignore unavailable to you. Want to Upgrade?

To: ibrandybuck who wrote (7469)	6/17/1998 6:17:00 PM
From: Ron Burns	Respond to of 19080

Oracle sales seen outpacing earnings Profit at database giant expected to inch up just 6% By Brenon Daly, CBS MarketWatch Last Update: 03:39 PM June 17, 1998 Also see: Software Report REDWOOD SHORES, Calif. (CBS.MW) -- Oracle shares edged higher in Wednesday afternoon trading, as investors expected a strong report from the database software giant after the market's close. Wall Street analysts expect the Redwood Shores, Calif.-based company (ORCL) to earn 38 cents per share, up a slight 6 percent from last year's 36 cents. The fiscal fourth-quarter earnings growth rate is just one-sixth the level the company has averaged over the past 5 years. ORCL NASD Last Chg. 24ÿ5/16 +0ÿ1/16 % Chg. Vol. +0.26% 10,994,800 Day Lo. Day Hi. 24ÿ1/8 25ÿ19/32 Open Prev. 24ÿ5/8 24ÿ1/4 As of Jun 17/98 6:13 pm ET Last Trade Jun 17/98 4:22 pm ET 15 MIN. DELAY Art Russell, analyst at St. Louis' Edward Jones, sees Oracle reporting $2.4 billion in sales, up 24 percent from the same quarter last year. Revenue growth is expected to be paced by a 38 percent increase in sales of Oracle applications. That compares to 10 to 12 percent growth in sales of the company's core database products. Service revenue, which accounts for about half of the money Oracle takes in, is projected to increase about 36 percent. Oracle gets service revenue from companies looking for training and consulting on Oracle software. Applications automate basic business functions, such as keeping track of product shipments, accounting or explaining job benefits to new employees. Oracle has been pushing into this fast-growing area as a way to offset a slowdown in sales of database software, which acts as a giant filing cabinet for vast amounts of information. Oracle remains the largest seller of database software, ahead of Sybase (SYBS) and Informix (IFMX). Both the rivals have stumbled in recent months, with Sybase currently trading at 6 15/16, less than 1 point above a 52-week low. Oracle shares added 13/16 to 25 1/16, but are still down significantly from a 52-week high of 42 1/8. But not all indications point to the stock moving higher. In options trading June 25 puts (ORQ=RE) have been much more active than June 25 calls (ORQ=FE). A put gains value as a stock declines, while a calls gains value as a stock rises. At current levels, Oracle shares change hands at about 22 times next year's estimated earnings. Edward Jones analyst Russell rates the stock a "strong buy", in part because of the valuation of Oracle, the second-largest software company. "We think of it very much as a value play at this point," Russell said. He projects earnings for the next fiscal year will expand 24 percent, to $1.19 per share. But, as the company slows its spending in coming quarters, he sees earnings growth edging up to 28-30 percent. Merrill Lynch analyst Chris Shilakes projected Oracle shares "could mark time in the mid-20s" if the company only matches earnings expectations. New applications and an analyst meeting in the fall could help shares rally, Shilakes said