Analysts upbeat about Oracle's business, customer wins

Summary:Oracle reports its fiscal third quarter earnings March 20 and analysts are expecting upbeat results and a major customer win. JMP Securities analyst Patrick Walravens said Oracle's business appears to be strong as it sells more products into its installed base.

Oracle reports its fiscal third quarter earnings March 20 and analysts are expecting upbeat results and a major customer win.

JMP Securities analyst Patrick Walravens said Oracle's business appears to be strong as it sells more products into its installed base.  Selling more to current customers is part of the reason Oracle bought Hyperion March 1. The deal gives Oracle more access to the CFOs that sign the checks.

"Our due diligence also suggests that Oracle closed a nine-figure enterprise license agreement (ELA) with a Fortune 500 company based in the Bay Area," reports Walravens.

Walravens raised his revenue target to $4.37 billion from $4.33 billion and his earnings target excluding charges to 24 cents a share from 23 cents a share. Wall Street is expecting earnings of 22 cents a share on revenue of $4.3 billion from Oracle (see blog focus), according to Thomson Financial.

UBS analyst Heather Bellini was also upbeat in a research note March 12. She expects Oracle to be in line with consensus estimates on sales and earnings. Bellini is projecting Oracle application licensing revenue--the line item Wall Street pays most attention to--of $377 million, up 40 percent from a year ago. That tally is ahead of the consensus estimate of $368 million.

Bellini wrote:

"Our checks remained strong this quarter with most attributing the success to Oracle's effort to outline its apps strategy and its differentiated vertical focus (versus SAP) to its customer-base. We are modeling Oracle's year over year organic license revenue growth of 18 percent, which compares to our SAP 1Q07 year over year license revenue growth forecast of 8 percent...

In fact, several partners we spoke with who resold both commented that their apps pipeline is surprisingly good and that they see the company competing more effectively versus SAP."

Bellini also added that database revenue is expected to be up 11 percent to $918 million. New software license sales are expected to be $1.30 billion, up 18 percent from a year ago.

You never know how Oracle's quarter will turn out until the numbers are actually reported, but the early indications are good. One thing is certain: Oracle's earnings conference calls are usually entertaining.

Topics: Oracle

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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