Oracle Gets Big Earnings Beat - Analyst Blog

Oracle Corp. (ORCL) has reported fiscal first quarter 2011 earnings results after the bell Thursday, and the much-anticipated report did not disappoint Oracle investors. Citing strength in new software licensing, Oracle reported a 50% jump in revenues (non-GAAP) to $7.6 billion in the quarter. This amounts to an EPS of 42 cents per share, easily beating the Zacks Consensus Estimate of 35 cents.

Though shares of ORCL had been surging throughout the month of September thus far with the high-profile addition of former Hewlett-Packard (HPQ) CEO Mark Hurd as co-president of Oracle alongside Larry Ellison, prior to the earnings results, investors had been pulling back in Thursday trading. Shares of ORCL pulled back roughly 1.5% prior to the earnings announcement; immediately afterward, shares have gone back up nearly 4% in the after-market, to $26.26 per share.

New software licensing shot up 25% in the quarter, helping Oracle outperform expectations. Analysts had been dormant regarding earnings estimate revisions: no changes had been made among the 15 analysts covering Oracle over the past month, and the 35 cents per share expected is only a penny higher than the consensus at the end of the company's fiscal 4th quarter in June.

In addition, Oracle reported a cash dividend of 5 cents per share prior to the earnings call, payable to shareholders of record October 6, 2010, payable November 3, 2010.

For his part, Hurd announced forthcoming developments for the company. At OpenWorld Oracle next week, two new high-end systems combining Sun hardware and Oracle software with be released. He also mentioned that $4 billion has been budgeted for research and development in fiscal 2011, which should further the company's scope of product offerings.

While clearly it is too early to credit Hurd with Oracle's successful first quarter results, he does happen to be starting his tenure with the company on a particularly positive note. Prior to the earnings announcement, ORCL shares carried a Zacks #2 Rank (Buy), though its longer-term recommendation is currently Neutral.
 
HEWLETT PACKARD (HPQ): Free Stock Analysis Report
 
ORACLE CORP (ORCL): Free Stock Analysis Report
 
Zacks Investment Research