Oracle Corporation (ORCL) Q2 Earnings Preview

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Oracle Corporation (NASDAQ:ORCL) will report F2Q13 results on 12/18. Consensus forecasts call for revenue of  $9.03bn and $0.61 EPS. Company guidance is for $8.81bn-9.16bn & $0.59-0.63). Despite continued macro headwinds some analysts expect a solid license performance in the framework of the company’s 5-15% yoy growth guidance range (consensus +9%).

Oracle Corporation (ORCL) Q2 Earnings Preview

With Oracle Corporation (NASDAQ:ORCL) paying the F2Q, F3Q & F4Q dividend on Dec. 21 our cash balance exiting F3Q is reduced by $600M (two Q’s of extra dividend payments) but the lower interest income from the lower cash balance has no material impact on F2H12 EPS or FCF.

Jason Blessing, SVP of Applications Development at Oracle, and formerly the EVP of Product and Technology at Taleo, may be leaving Oracle Corporation (NASDAQ:ORCL), according to reports. This departure would be notable because, on April 26, when Oracle announced the Taleo acquisition, Mark Hurd indicated that Mr. Blessing and Neil Hudspith, Taleo’s Chief Customer Officer at the time, had accepted leadership positions at Oracle to “ensure the continuity of relationships with Taleo customers” and to maintain “vision and expertise for the Taleo products.”

Analysts have mixed views regarding Oracle’s earnings.

In a recent report regarding Q2 earnings for the tech giant, analysts from Jefferies state:

Our most recent field work points to an in-line F2Q13, although it is possible license could be slightly better given the comp, inorganic contribution and sequential demand trends that do not appear to have deteriorated significantly. Integrated system trends continue to sound better, growth trends in the core sound OK, and Fusion Apps are a slow burn. Remain Hold, but raise our PT to $34 to reflect a shift to FY14.

However, Morgan Stanley sees several catalysts coming together, they note:

Ramping sales productivity, growing Fusion Apps. momentum and continued strength in Exa-series should become more visible via accelerating license growth in Q2, despite an uneven macro. At 11X CY13 EPS, shares do not reflect ORCL’s ability to sustain mid-to-high teens EPS growth long term.


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