Oracle Corp. (ORCL, Financial) filed Quarterly Report for the period ended 2012-02-29.
Oracle Corp has a market cap of $149.47 billion; its shares were traded at around $28.55 with a P/E ratio of 13.4 and P/S ratio of 4.2. The dividend yield of Oracle Corp stocks is 0.8%. Oracle Corp had an annual average earning growth of 17.4% over the past 10 years. GuruFocus rated Oracle Corp the business predictability rank of 3.5-star.
Our hardware systems support margins have been and will be affected by our acquisitions and related accounting including fair value adjustments relating to hardware systems support obligations assumed and by the amortization of intangible assets. As required by business combination accounting rules, we recorded adjustments to reduce our hardware systems support revenues for contracts assumed from our acquisitions to their estimated fair values. These amounts would have been recorded as hardware systems support revenues by the acquired businesses as independent entities in the amounts of $6 million and $27 million for the three months ended February 29, 2012 and February 28, 2011, respectively, and $26 million and $133 million for the nine months ended February 29, 2012 and February 28, 2011, respectively. To the extent underlying hardware systems support contracts are renewed with us following an acquisition, we will recognize the revenues for the full values of the hardware systems support contracts over the support periods.
In connection with our acquisitions, we have estimated the fair values of the software support and hardware systems support obligations assumed. Due to our application of business combination accounting rules, we did not recognize software license updates and product support revenues primarily related to support contracts that would have otherwise been recorded by the acquired businesses as independent entities, in the amounts of $17 million and $16 million for the three months ended February 29, 2012 and February 28, 2011, respectively, and $40 million and $64 million for the nine months ended February 29, 2012 and February 28, 2011, respectively. In addition, we did not recognize hardware systems support revenues related to hardware systems support contracts that would have otherwise been recorded by the acquired businesses as independent entities in the amounts of $6 million and $27 million for the three months ended February 29, 2012 and February 28, 2011, respectively, and $26 million and $133 million for the nine months ended February 29, 2012 and February 28, 2011, respectively.
First Nine Months Fiscal 2012 Compared to First Nine Months Fiscal 2011: Excluding the effect of currency rate fluctuations, the growth in our software license updates and product support revenues during the first nine months of fiscal 2012 was primarily attributable to the same reasons as noted above. On a constant currency basis, the Americas contributed 52%, EMEA contributed 30% and Asia Pacific contributed 18% to the increase in software license updates and product support revenues. Software license updates and product support revenues in the first nine months of fiscal 2012 included incremental contributions of $65 million from our recent acquisitions. Software license updates and product support revenues primarily related to support contracts in the amounts of $40 million and $64 million that would have been otherwise recorded by our acquired businesses as independent entities were not recognized in the first nine months of fiscal 2012 and 2011, respectively, due to business combination accounting rules.
Long-Term Customer Financing: We offer certain of our customers the option to acquire our software products, hardware systems products and services offerings through separate long-term payment contracts. We generally sell these contracts that we have financed on a non-recourse basis to financial institutions within 90 days of the contracts dates of execution. We record the transfers of amounts due from customers to financial institutions as sales of financial assets because we are considered to have surrendered control of these financial assets. We financed $705 million and $686 million, respectively, or approximately 12% of our new software license revenues in each of the first nine months of fiscal 2012 and 2011, and $81 million and $78 million, respectively, or approximately 3% and 2%, respectively, of our hardware systems products revenues in the first nine months of fiscal 2012 and 2011.
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Oracle Corp has a market cap of $149.47 billion; its shares were traded at around $28.55 with a P/E ratio of 13.4 and P/S ratio of 4.2. The dividend yield of Oracle Corp stocks is 0.8%. Oracle Corp had an annual average earning growth of 17.4% over the past 10 years. GuruFocus rated Oracle Corp the business predictability rank of 3.5-star.
Highlight of Business Operations:
We recorded adjustments to reduce support obligations assumed in business combinations to their estimated fair values at the acquisition dates. As a result, as required by business combination accounting rules, we did not recognize software license updates and product support revenues primarily related to support contracts that would have been otherwise recorded by the acquired businesses as independent entities in the amounts of $17 million and $16 million for the three months ended February 29, 2012 and February 28, 2011, respectively, and $40 million and $64 million for the nine months ended February 29, 2012 and February 28, 2011, respectively. To the extent underlying support contracts are renewed with us following an acquisition, we will recognize the revenues for the full value of the support contracts over the support periods, the majority of which are one year.Our hardware systems support margins have been and will be affected by our acquisitions and related accounting including fair value adjustments relating to hardware systems support obligations assumed and by the amortization of intangible assets. As required by business combination accounting rules, we recorded adjustments to reduce our hardware systems support revenues for contracts assumed from our acquisitions to their estimated fair values. These amounts would have been recorded as hardware systems support revenues by the acquired businesses as independent entities in the amounts of $6 million and $27 million for the three months ended February 29, 2012 and February 28, 2011, respectively, and $26 million and $133 million for the nine months ended February 29, 2012 and February 28, 2011, respectively. To the extent underlying hardware systems support contracts are renewed with us following an acquisition, we will recognize the revenues for the full values of the hardware systems support contracts over the support periods.
In connection with our acquisitions, we have estimated the fair values of the software support and hardware systems support obligations assumed. Due to our application of business combination accounting rules, we did not recognize software license updates and product support revenues primarily related to support contracts that would have otherwise been recorded by the acquired businesses as independent entities, in the amounts of $17 million and $16 million for the three months ended February 29, 2012 and February 28, 2011, respectively, and $40 million and $64 million for the nine months ended February 29, 2012 and February 28, 2011, respectively. In addition, we did not recognize hardware systems support revenues related to hardware systems support contracts that would have otherwise been recorded by the acquired businesses as independent entities in the amounts of $6 million and $27 million for the three months ended February 29, 2012 and February 28, 2011, respectively, and $26 million and $133 million for the nine months ended February 29, 2012 and February 28, 2011, respectively.
First Nine Months Fiscal 2012 Compared to First Nine Months Fiscal 2011: Excluding the effect of currency rate fluctuations, the growth in our software license updates and product support revenues during the first nine months of fiscal 2012 was primarily attributable to the same reasons as noted above. On a constant currency basis, the Americas contributed 52%, EMEA contributed 30% and Asia Pacific contributed 18% to the increase in software license updates and product support revenues. Software license updates and product support revenues in the first nine months of fiscal 2012 included incremental contributions of $65 million from our recent acquisitions. Software license updates and product support revenues primarily related to support contracts in the amounts of $40 million and $64 million that would have been otherwise recorded by our acquired businesses as independent entities were not recognized in the first nine months of fiscal 2012 and 2011, respectively, due to business combination accounting rules.
Long-Term Customer Financing: We offer certain of our customers the option to acquire our software products, hardware systems products and services offerings through separate long-term payment contracts. We generally sell these contracts that we have financed on a non-recourse basis to financial institutions within 90 days of the contracts dates of execution. We record the transfers of amounts due from customers to financial institutions as sales of financial assets because we are considered to have surrendered control of these financial assets. We financed $705 million and $686 million, respectively, or approximately 12% of our new software license revenues in each of the first nine months of fiscal 2012 and 2011, and $81 million and $78 million, respectively, or approximately 3% and 2%, respectively, of our hardware systems products revenues in the first nine months of fiscal 2012 and 2011.
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