Oracle Earnings Preview... Looking for the Unexpected

Oracle logoOracle Corporation (NASDAQ: ORCL) is set to report earnings after the close of trading on Tuesday. The enterprise software leader is expected to report earnings of $0.61 EPS and $9.03 billion in revenue. For the existing quarter, analysts expect earnings of $0.66 EPS and $9.46 billion in revenue.

Despite the fairly recent woes of the past in earnings, Oracle is now back up close to within about 2% of its 52-week high of $33.29. The consensus analyst price target is also above $35.80 for this stock, which we would note represents an all-time high.

If Oracle only meets its earnings estimates for its fiscal year of May 2013, this stock is not expensive at barely about 12-times earnings. Options traders appear to be braced for a move up to almost 3% in either direction. If there is a disappointment, the longer-term moving averages are too far under the current price to offer much objectivity as the 50-day moving average is at $31.01 and the 200-day moving average is all the way down at $29.77.

One research note stood out recently. Oracle was only reiterated with an Outperform rating by Credit Suisse, but this came along with a $40 price target. The firm even summarized its call as follows by saying "Headwinds Fading… So, Jump on Board!"

We were a bit disappointed with Oracle over its dividend policy. Rather than deliver a large one-time dividend to return capital to holders ahead of a tax hike, Oracle slid forward the 2013 payouts for January, April and July into December. While this was somewhat aggressive, it really did not get Oracle on a real competitive landscape as far as a permanent dividend policy when Larry Ellison has already said he will not be pursuing any large acquisitions in the near future.

Oracle's market capitalization rate is $157 billion and Thomson Reuters has a consensus estimate for its fiscal year in May 2013 of almost $38.3 billion.

JON C. OGG


Filed under: 24/7 Wall St. Wire, Earnings, Technology, Technology Companies Tagged: featured, ORCL
Read Full Story

Markets

DJIA 21,394.76 -2.53 -0.01%
NASDAQ 6,265.25 28.56 0.46%
S&P 500 2,438.30 3.80 0.16%
NIKKEI 225 20,153.35 20.68 0.10%
HANG SENG 25,871.89 201.84 0.79%
DAX 12,836.84 103.43 0.81%
USD (per EUR) 1.12 0.00 -0.17%
USD (per CHF) 0.97 0.00 0.40%
JPY (per USD) 111.64 0.40 0.36%
GBP (per USD) 1.27 0.00 -0.02%

Can't get enough business news?

Sign up for Finance Report by AOL and get everything from retailer news to the latest IPOs delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.