Oracle Corp (
hit a 52-week high of $36.96 on Thursday, Dec 19, 2013. The
bullish run reflects Oracle's better-than-expected second quarter
results and an optimistic guidance.
The closing price of Oracle on Dec 19 was $36.60, representing a
modest one-year return of about 7.8% and a year-to-date return of
about 5.5%. According to Bloomberg, this was Oracle's highest
closing price since Oct 2000.
The S&P 500 jumped 25.3% and 23.7%, respectively during the
same period. However, Oracle's returns (both one-year and
year-to-date) are much better than its nearest rivals
International Business Machines (
SAP AG (
Oracle delivered a positive average earnings surprise of 2.4%
over the past four quarters. This Zacks Rank #2 (Buy) stock has a
market cap of $157.69 billion and a long-term expected earnings
growth rate of 12.1%.
Good Second Quarter, Optimistic Outlook
Oracle beat the Zacks Consensus Estimates on both lines in the
second quarter of fiscal 2014. Earnings of 66 cents per share
were a couple of cents ahead of the Zacks Consensus Estimate.
Revenues of $9.28 billion increased 2.0% year over year and
succeeded in beating the consensus mark after missing it in the
past three quarters. The company continues to add new customers
that include the likes of
Procter & Gamble (
For the third quarter of 2014, Oracle expects non-GAAP earnings
in the range of 68 to 72 cents per share. Revenues on a non-GAAP
basis are expected to grow in the range of 2.0% to 6.0% (in $).
Key Growth Catalysts
We believe that strong engineered systems and cloud bookings are
positives in the near term. Also, the speedy adoption of
engineered systems and cloud suites will drive incremental
top-line growth, going ahead.
Oracle's low cost engineered systems (Oracle Virtual Compute
Appliance) are also expected to attract price-sensitive customers
in the long run. Moreover, higher subscription revenues are
expected to provide a recurring high margin revenue base, going
Oracle's strong balance sheet and cash flow generation ability
are also expected to support and expand its current divided yield
of 1.40% in 2014 and beyond.
The Zacks Consensus Estimate for the third quarter remained
unchanged at 67 cents over the past 30 days. For fiscal 2014 and
2015, the earnings estimate remained steady at $2.78 and $3.01,
respectively over the same time frame.
INTL BUS MACH (IBM): Free Stock Analysis
ORACLE CORP (ORCL): Free Stock Analysis
PROCTER & GAMBL (PG): Free Stock Analysis
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