Ahead of the Bell: Oracle to break down fiscal 1Q

AP News
Posted: Sep 20, 2012 7:04 AM
Ahead of the Bell: Oracle to break down fiscal 1Q

REDWOOD SHORES, Calif. (AP) — Oracle will provide a glimpse at the state of the business software industry Thursday afternoon with the release of its fiscal first-quarter earnings.

The numbers, due out after the stock market closes, are expected to reflect a sales slowdown as companies clamp down on their spending amid the uncertainty surrounding the still-fragile economy, the upcoming U.S. presidential elections, massive government debt problems and looming tax increases in the U.S.

Analysts surveyed by FactSet expect Oracle to report revenue of $8.4 billion for the three months ending in August. That would be an increase of less than 1 percent from the same time last year. After taking out certain expenses for past acquisitions and employee stock expenses, Oracle's earnings are expected to rise by about 10 percent from last year to 53 cents per share.

Those anticipated results look even less impressive, given Oracle has added to its array of software products to sell through a series of acquisitions since last year's fiscal first quarter. The major deals include Oracle's $2 billion purchase of Taleo Corp, a maker of employee-recruitment software, and a $1.5 billion acquisition of RightNow Technologies, which makes software that helps companies manage their customer relationships.

Meanwhile, Oracle Corp. is still struggling to reap returns from its $7.3 billion acquisition of struggling computer maker Sun Microsystems in 2010.

Even if Oracle's latest quarterly results turn out to be a letdown, many investors may be paying more attention to the company's forecast for the current quarter. That's because the summer timing of Oracle's fiscal first quarter almost always is the company's weakest sales period of the year, making it easier for Wall Street to look past the number, as long as they aren't too horrible.