Preview: Oracle (ORCL) Investors Looking at Sun, License Growth in Q1
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Get Alerts ORCL Hot Sheet
Price: $147.21 +3.62%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 0.7%
Revenue Growth %: +28.1%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 0.7%
Revenue Growth %: +28.1%
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Oracle (Nasdaq: ORCL) shares are trading lower today, ahead of the company's first quarter earnings release, expected after the market closes today, September 16, 2010. Shares are down 1.90% to $25.25 in afternoon trading.
ORCL is expected to report an EPS of $0.37 on revs of $7.27 billion. Last quarter, the company had an EPS of $0.60, ex-items, and revs of $9.6 billion, compared to the consensus EPS of $0.54 and $9.5 billion in revs. For Q110, ORCL had an EPS of $0.30, ex-items, and revs of $5.1 billion, mixed to the consensus EPS of $0.30 and $5.25 billion in revs.
Shares of the company dropped 1.4% through the quarter to $21.85 at the end of August. The company is down 11.5% since the start of 2010. The S&P 500 is 1.6% lower over the same period.
For a simple valuation, the company is trading at a forward P/E of 13.3 FY11 EPS estimates. By comparison, International Business Machines (NYSE: IBM) is going for about 10.5x, Microsoft (Nasdaq: MSFT) is at 10.7x, and Hewlett-Packard (NYSE: HPQ) (we know, SAP might be a better comparison) is at 8x.
Data from Bloomberg shows that 33 analysts have a Buy rating on ORCL, 7 say to Hold, and one recommends to Sell the shares. The analyst price target consensus is $29.38 with a high of $40 and a low of $24.
News Through the Quarter
In early June, Oracle amended their acquisition plan of Sun Micro. They initially anticipated costs of $325 million, which $235 million would be recorded during the three and nine months ended February 28, 2010. However, they increased that view to costs of $675 - $825 million, which are expected to be incurred though CY11.
In July, the company was sued by the U.S. Department of Justice under the False Claims Act. The DoJ alleged that Oracle defrauded the US on its General Services Administration contract which took place over the course of 1998 to 2006. Bloomberg reported that the case may cost Oracle as much as $1 billion. The case in ongoing.
Oracle then filed a patent infringement suit against Google, Inc. (Nasdaq: GOOG), claiming infringement on Java-related intellectual property in the development of their Android operating system.
Summary
Goldman Sachs sees the company post "at least in-line" Q111 results. They expect an EPS of $0.36 on revs of $7.28 billion. They expected Sun to contribute $1.9 billion to the top-line, or approximately 25% of revs. Goldman rates the company a Buy, with a 12-month price target of $27.
An analyst at Citigroup also said that he expects Oracle will report a 13% increase in sales of new software licenses for the quarter. The figure is important, as it shows the growth of the company, rather than selling to the same customers quarter-over-quarter. The Street is looking for a 9% increase in license revs.
Though it's not expected to impact this quarter's results, the company snatched up for Hewlett-Packard CEO Mark Hurd, after he left the company on a sexual harassment investigation. The move boosted Oracle's shares, on September 7, up about 7% intraday. CEO Larry Ellison touted Hurd as soon as he left the company, and upon his hire, said,"There is no executive in the IT world with more relevant experience than Mark. Oracle's future is engineering complete and integrated hardware and software systems for the enterprise." Hurd is a Co-President at the company. Hurd is also expected to be on the conference call, after the market closes today.
Oracle Corp. is expected to release their Q111 earnings on Thursday, September 16, 2010, at approximately 4:00pm EDT. Stay tuned to StreetInsider.com's
our analysis of the highly-anticipated quarterly results within seconds of
their release.
ORCL is expected to report an EPS of $0.37 on revs of $7.27 billion. Last quarter, the company had an EPS of $0.60, ex-items, and revs of $9.6 billion, compared to the consensus EPS of $0.54 and $9.5 billion in revs. For Q110, ORCL had an EPS of $0.30, ex-items, and revs of $5.1 billion, mixed to the consensus EPS of $0.30 and $5.25 billion in revs.
Shares of the company dropped 1.4% through the quarter to $21.85 at the end of August. The company is down 11.5% since the start of 2010. The S&P 500 is 1.6% lower over the same period.
For a simple valuation, the company is trading at a forward P/E of 13.3 FY11 EPS estimates. By comparison, International Business Machines (NYSE: IBM) is going for about 10.5x, Microsoft (Nasdaq: MSFT) is at 10.7x, and Hewlett-Packard (NYSE: HPQ) (we know, SAP might be a better comparison) is at 8x.
Data from Bloomberg shows that 33 analysts have a Buy rating on ORCL, 7 say to Hold, and one recommends to Sell the shares. The analyst price target consensus is $29.38 with a high of $40 and a low of $24.
News Through the Quarter
In early June, Oracle amended their acquisition plan of Sun Micro. They initially anticipated costs of $325 million, which $235 million would be recorded during the three and nine months ended February 28, 2010. However, they increased that view to costs of $675 - $825 million, which are expected to be incurred though CY11.
In July, the company was sued by the U.S. Department of Justice under the False Claims Act. The DoJ alleged that Oracle defrauded the US on its General Services Administration contract which took place over the course of 1998 to 2006. Bloomberg reported that the case may cost Oracle as much as $1 billion. The case in ongoing.
Oracle then filed a patent infringement suit against Google, Inc. (Nasdaq: GOOG), claiming infringement on Java-related intellectual property in the development of their Android operating system.
Summary
Goldman Sachs sees the company post "at least in-line" Q111 results. They expect an EPS of $0.36 on revs of $7.28 billion. They expected Sun to contribute $1.9 billion to the top-line, or approximately 25% of revs. Goldman rates the company a Buy, with a 12-month price target of $27.
An analyst at Citigroup also said that he expects Oracle will report a 13% increase in sales of new software licenses for the quarter. The figure is important, as it shows the growth of the company, rather than selling to the same customers quarter-over-quarter. The Street is looking for a 9% increase in license revs.
Though it's not expected to impact this quarter's results, the company snatched up for Hewlett-Packard CEO Mark Hurd, after he left the company on a sexual harassment investigation. The move boosted Oracle's shares, on September 7, up about 7% intraday. CEO Larry Ellison touted Hurd as soon as he left the company, and upon his hire, said,"There is no executive in the IT world with more relevant experience than Mark. Oracle's future is engineering complete and integrated hardware and software systems for the enterprise." Hurd is a Co-President at the company. Hurd is also expected to be on the conference call, after the market closes today.
Oracle Corp. is expected to release their Q111 earnings on Thursday, September 16, 2010, at approximately 4:00pm EDT. Stay tuned to StreetInsider.com's
our analysis of the highly-anticipated quarterly results within seconds of
their release.
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