Collins Stewart Comments on Oracle (ORCL) Following Q4 Results, Maintains $36 Price Target
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Price: $34.05 -0.53%
Rating Summary:
18 Buy, 10 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 13
Rating Summary:
18 Buy, 10 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 13
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Collins Stewart is maintaining its Hold rating and $36 price target on shares of Oracle (NASDAQ: ORCL) following the release of its Q4 earnings on June 23, 2011.
The company released its results with $10.81 billion in revenue and EPS of $0.75, slightly above the Street's estimates of $10.75 billion and $0.71.
During the quarter software growth of 19 percent was experienced strength in both database and apps. while topping the its guidance of 9-19 percent. Revenues for the company's hardware segment missed the Street's estimates by 12 percent. The firm believes that Oracle’s general purpose server sales (Sparc/Solaris) are falling quicker than initially forecasted.
The firm notes that operating margin came in at 48.5 percent for the quarter, in-ine with consensus, but with higher software and lower hardware revenues, Collins Stewart believes the mix should have had a positive effect on margins, unless hardware operating margins are a lot lower than software.
ORCL released its Q1 guidance with a revenue range of $8.27-$8.5 billion and EPS an EPS range of $0.45-$0.48. The Street is currently forecasting $8.28 billion and $0.46. The firms current EPS estimates for Q1 and FY12 is $0.46 and $2.38.
An analyst at Collins Stewart comments, "We think this decline is more than offsetting growth in Exadata and along with a lack of major acquisitions limits Oracle’s potential for upside to consensus expectations in FY12, though we think doesn’t present a risk to current estimates, More importantly though, the weakness in hardware does raise questions about the success of Oracle’s appliance strategy which has fostered the idea that Oracle’s growth is being propelled by secular drivers rather than cyclical drivers."
For more ratings news on Oracle click here and for the rating history of Oracle click here.
Shares of Oracle closed at $32.46 yesterday, with a 52 week range of $21.24-$36.50.
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The company released its results with $10.81 billion in revenue and EPS of $0.75, slightly above the Street's estimates of $10.75 billion and $0.71.
During the quarter software growth of 19 percent was experienced strength in both database and apps. while topping the its guidance of 9-19 percent. Revenues for the company's hardware segment missed the Street's estimates by 12 percent. The firm believes that Oracle’s general purpose server sales (Sparc/Solaris) are falling quicker than initially forecasted.
The firm notes that operating margin came in at 48.5 percent for the quarter, in-ine with consensus, but with higher software and lower hardware revenues, Collins Stewart believes the mix should have had a positive effect on margins, unless hardware operating margins are a lot lower than software.
ORCL released its Q1 guidance with a revenue range of $8.27-$8.5 billion and EPS an EPS range of $0.45-$0.48. The Street is currently forecasting $8.28 billion and $0.46. The firms current EPS estimates for Q1 and FY12 is $0.46 and $2.38.
An analyst at Collins Stewart comments, "We think this decline is more than offsetting growth in Exadata and along with a lack of major acquisitions limits Oracle’s potential for upside to consensus expectations in FY12, though we think doesn’t present a risk to current estimates, More importantly though, the weakness in hardware does raise questions about the success of Oracle’s appliance strategy which has fostered the idea that Oracle’s growth is being propelled by secular drivers rather than cyclical drivers."
For more ratings news on Oracle click here and for the rating history of Oracle click here.
Shares of Oracle closed at $32.46 yesterday, with a 52 week range of $21.24-$36.50.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
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