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Tech Check
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Even during the best of times, Oracle's [ORCL
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] third quarter earnings report would have been pretty stellar. But when you put it in the context of one of the worst global recessions ever seen, and the ongoing IT depression enterprise stalwarts have been shouldering, today's big beat is pretty astounding.
The company reports $5.5 billion in revenue, well above the $5.4 billion anticipated by the Street, and a big, 35 cents in earnings per share against the 32 cent consensus. But as I mentioned in an earlier post about Oracle, this company is hugely susceptible to foreign currency fluxuations, and this quarter was no different. Had currency remained as expected, Oracle could have realized a full nickel a share more in EPS bringing the number to 40 cents a share, or 20 percent better than analysts were anticipating.
Still, the 3-penny beat is no slouch and Oracle shares are off to the races on this news. The announcement from the company that it would be declaring its first cash dividend ever of a nickel a share, or 20 cents annually, is certainly helping as well.
Oracle also beat the Street when it comes to non-GAAP operating margins. Oracle reported 46 percent margins, up 510 basis points compared to the same period a year earlier. Impressive to say the least.
Oracle made us dig for the numbers that matter in its release today which was a little odd. Sure, total software licensing revenue, the key metric to measure this company's health and performance, stuck out like vividly, reaching $1.516 when analysts were looking for something closer to $1.45 billion instead. Database and Middleware licenses, the bread and butter here, hit $1.120 billion, a disappointment compared to the $1.365 the Street expected. Application revenue reached $396 million versus the $357 million consensus.
Before we get too excited about all this, just keep in mind that while Oracle did resoundingly beat expectations on the top and bottom lines, even with the disappointing tech licensing number, these categories are much lower sequentially, and lower when measured against the same period last year. This speaks to what JMP Securities' analyst Patrick Walravens told me in my last post, that the downturn and slowdown in Oracle's business is noticeable, and continues.
Still, give the company props for beating the Street's pessimistic view of the company. That, and a healthy amount of short covering is what's driving these shares after-market. Guidance comes on the conference call this evening.
Questions? Comments?
Data is a real-time snapshot *Data is delayed at least 15 minutes