Shares of software giant Oracle (ORCL, Financial) suffered under losses after the publication of the quarterly results. The stock of the American software and hardware company Oracle had to accept losses within the recent weeks and on Thursday, the day of the publication of the quarterly report. These losses are, however, at high levels and not tragic.
After all, the company beats analysts' expectations in the fourth quarter of its fiscal year thanks to a strong services and software business. In its outlook for the first quarter of fiscal year 2011/12, the company disappointed the high expectations of the market. The stock lost in after-hours trading 4.4 percent and closed at USD $31.14 on Friday.
Focus on profitable parts of the hardware business...
In the current first quarter of this fiscal year, Oracle expects August licensing revenues to increase in an amount of "only" 10 to 20 percent. In the past fiscal year 2010/11, the increase stood at 23 percent. Earnings per share are expected to increase by about ten percent to 45 - 48 cents. The outlook for the hardware business division caused nervousness. Here, Oracle sees revenue growth in the first quarter from negative five to plus five percent over the same period last year. Not really bad due to the fact that the company makes only little money in this segment.
Oracle felt the differentiated development of the business already in the final quarter of 2010/11 by end of May. Turnover increased by twelve percent to USD 10.8 billion and net income increased as much as 64 percent to USD 3.872 dollars. Throughout the 2010/11 financial year, the Group achieved a net profit of USD 8.55 billion. This represents an increase of 39 percent. Revenue rose 33 percent to USD 35.8 billion.
While the software and service revenues increased sharply in the last three months of last fiscal year, the hardware business of Sun remained weak and fell short of expectations. Oracle achieved here with a drop of six percent to USD $1.16 billion less revenue than last year. The group by itself had predicted an increase of up to twelve percent. However, the development is related to the focus on highly profitable areas of the server business. This process led the operating margin rose from 46 percent last year to 56 percent.
…and focus on organic growth
While Oracle has grown in recent years inorganicly by numerous of acquisitions, many possible targets have become quite expensive, said the company founder, major owner and CEO Larry Ellison. In addition, he announced that the company will focus on organic growth. Even if that should be more than a tactical statement, shares of Oracle's are still cheap for a technology company. The price-earnings ratios amounts to $12.9 and $11.7 based on earnings estimates for the current and next fiscal year.
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After all, the company beats analysts' expectations in the fourth quarter of its fiscal year thanks to a strong services and software business. In its outlook for the first quarter of fiscal year 2011/12, the company disappointed the high expectations of the market. The stock lost in after-hours trading 4.4 percent and closed at USD $31.14 on Friday.
Focus on profitable parts of the hardware business...
In the current first quarter of this fiscal year, Oracle expects August licensing revenues to increase in an amount of "only" 10 to 20 percent. In the past fiscal year 2010/11, the increase stood at 23 percent. Earnings per share are expected to increase by about ten percent to 45 - 48 cents. The outlook for the hardware business division caused nervousness. Here, Oracle sees revenue growth in the first quarter from negative five to plus five percent over the same period last year. Not really bad due to the fact that the company makes only little money in this segment.
Oracle felt the differentiated development of the business already in the final quarter of 2010/11 by end of May. Turnover increased by twelve percent to USD 10.8 billion and net income increased as much as 64 percent to USD 3.872 dollars. Throughout the 2010/11 financial year, the Group achieved a net profit of USD 8.55 billion. This represents an increase of 39 percent. Revenue rose 33 percent to USD 35.8 billion.
While the software and service revenues increased sharply in the last three months of last fiscal year, the hardware business of Sun remained weak and fell short of expectations. Oracle achieved here with a drop of six percent to USD $1.16 billion less revenue than last year. The group by itself had predicted an increase of up to twelve percent. However, the development is related to the focus on highly profitable areas of the server business. This process led the operating margin rose from 46 percent last year to 56 percent.
…and focus on organic growth
While Oracle has grown in recent years inorganicly by numerous of acquisitions, many possible targets have become quite expensive, said the company founder, major owner and CEO Larry Ellison. In addition, he announced that the company will focus on organic growth. Even if that should be more than a tactical statement, shares of Oracle's are still cheap for a technology company. The price-earnings ratios amounts to $12.9 and $11.7 based on earnings estimates for the current and next fiscal year.
Selected Articles:
· 20 Software/Application Stocks With A Margin Above 20 Percent
· 14 Big Players In Application And Software Industry
