Oracle's Impressive Q2 Earnings Boost Shares

Strategic Insights -

Oracle Corp. (Nasdaq: ORCL) stock rose 4.02% after market hours on Thursday, following the company's announcement of its second-quarter fiscal 2010 earnings. The market reacted positively to the company's better-than-expected earnings and growing market share. Oracle's acquisition of Sun Microsystems (Nasdaq: JAVA) in January is also expected to contribute $1.5 billion in non-GAAP operating income upon closing.

Key Takeaways:

  • Oracle's second-quarter fiscal 2010 earnings surpassed the Zacks Consensus Estimate of 35 cents, with non-GAAP earnings per share ranging between 36 and 38 cents a share.
  • The company's total revenue is expected to rise between 3% and 6% in the third quarter, at the current exchange rates.
  • Oracle captured market share from SAP AG (NYSE: SAP) for the fourth consecutive quarter, with positive expectations regarding the European Commission's approval of the Sun Microsystems acquisition in January.
  • Competition is expected to remain intense from strong competitors such as International Business Machines Corporation (NYSE: IBM) and Microsoft Corporation (Nasdaq: MSFT).
  • Oracle's results and guidance demonstrate that enterprise spending is on the mend.
  • The Sun acquisition is expected to further boost shares, with long-term growth prospects looking promising.

Statistics:

  • Oracle's second-quarter fiscal 2010 earnings: 36-38 cents per share
  • Zacks Consensus Estimate: 35 cents per share
  • Total revenue expected to rise: 3-6% in the third quarter
  • Market share captured from SAP AG: 4th consecutive quarter
  • Expected contribution from Sun acquisition: $1.5 billion in non-GAAP operating income

Sources:

  • Zacks.com: Oracle Impresses the Market
  • Oracle Corp.: Q2 Fiscal 2010 Earnings Announcement
  • SAP AG: Market share information
  • European Commission: Approval of Sun Microsystems acquisition
  • International Business Machines Corporation: Competitive information
  • Microsoft Corporation: Competitive information
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