Oracle Corp. is expected to post gains in its first-quarter profit and sales when it reports results for the traditionally weak period after the market's close Thursday, even as Wall Street analysts have warned that a poor economy may be hindering the business software giant.
Analysts on average expect Oracle to post earnings excluding special items for the period ended in August of 26 cents a share, on $5.45 billion in revenue, according to FactSet Research.
That compares to earnings excluding special items of 22 cents a share, and $4.53 billion in revenue in the same period a year earlier.
Wall Street analysts have generally sounded cautious about Oracle's stock recently. Oracle shares have dipped nearly 20% in the past month. The shares rose slightly Thursday, to close at $19.35.
Credit Suisse analyst Philip Winslow wrote in a note to clients earlier this week that he expects a "difficult first quarter" for Oracle, "due to a sluggish application business, disruption in sales due to sales re-organization, as well as foreign currency headwinds."
Oracle, historically a powerhouse in database software, has more recently used a string of acquisitions to construct a formidable line of software applications for businesses.
That's drawn it into more direct competition with German rival SAP AG, while providing new potential sources of revenue.
In its first fiscal quarter last year, Oracle posted surprisingly strong growth in the sale of new software application licenses, helping boost its stock price.
Citigroup analyst Brent Thill wrote in a recent research note that Oracle's flagging share price recently is due to low expectations for the company's first-quarter license revenue growth.
"Despite a strong [fourth quarter] backlog, we believe [the first quarter] lived up to its difficult reputation," Thill wrote.
Still, Thill wrote that while Oracle may issue conservative guidance for its current, second quarter, if that guidance is in the "low to mid-teen" range, "the stock could rally."
Author: John Letzing @ MarketWatch.com
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