Oracle profit rises 28%; FedEx slips

Oracle Corp. said Thursday that its fiscal first-quarter profit jumped 28 percent, beating Wall Street's expectations, as software sales stayed steady despite turmoil in the U.S. economy.

The business software company's net income for the three months ended Aug. 31 rose to $1.08 billion, or 21 cents per share, from $840 million, or 16 cents per share, a year ago.

Excluding expenses for employee stock options and acquisitions, Oracle posted earnings of 29 cents per share, 2 cents better than analysts had expected, according to a Thomson Reuters poll.

Revenue increased 18 percent, to $5.33 billion.

Oracle forecast adjusted earnings per share of 35 to 36 cents per share in the current quarter. Analysts were expecting 35 cents per share.

Oracle shares gained 65 cents, or 3.6 percent, to $18.75.

FedEx Corp.: The package-delivery company said its fiscal first-quarter earnings fell 22 percent but still matched Wall Street expectations, as cost cuts partially offset slowing global growth.

The company also predicted it will beat analysts' expectations for its fiscal second quarter, and said it will hike shipping rates at its Express unit starting next year.

FedEx earned $384 million, or $1.23 per share, in the three months ended Aug. 31, compared with $494 million, or $1.58 per share, a year earlier.

Revenue rose 8 percent, to $9.97 billion.

The results reflect a shift away from more-expensive overnight shipping. The drop in such deliveries at FedEx, considered a proxy for the economy, may be an "ominous" sign for U.S. growth prospects, said Dan Ortwerth, an Edward Jones & Co. analyst in St. Louis.

"It's quashed any hopes that people have that we're going to emerge from the current period of weakness sooner rather than later," Ortwerth said.

Overall, the company is mitigating the weak U.S. economy and slowing international growth "pretty well" while maintaining strong customer service, said Stifel Nicolaus analyst David Ross. That includes a planned update of its Boeing fleet to further cut fuel consumption.

For the fiscal second quarter, FedEx expects to earn $1.40 to $1.60 per share, well above Wall Street's average forecast of $1.35 per share for the period. It made $1.54 a share in the year-ago quarter.

FedEx shares rose $3.06, or 3.5 percent, to $91.13.

ConAgra Foods Inc.: The packaged-foods company said fiscal first-quarter profit more than doubled on the sale of its commodity trading unit, but rising costs hurt results and drove the company to lower its outlook for its fiscal year.

The maker of Hunts, Healthy Choice and other brands earned $442.4 million, or 94 cents per share, in the quarter ended Aug. 24, up from $175.4 million, or 36 cents per share, a year ago. That includes a gain of 71 cents per share for selling its trading and merchandising operations.

Earnings from continuing operations totaled 23 cents per share, a penny below Wall Street expectations.

Revenue rose 17 percent, to $3.07 billion.

Chief Executive Gary Rodkin said the company expects stronger profit in the second half of the year because of the recent price increases, cost cutting, new products and an expected moderation of rising commodity costs. He said ConAgra plans to launch a new line of shelf-stable Healthy Choice meals in the coming months.

Citigroup analyst David Driscoll said in a research note that many food companies have benefited because consumers are eating less at restaurants and getting more of their food at grocery stores.

"This has resulted in improved results across the sector," Driscoll wrote. "ConAgra has clearly lagged these improvements but ultimately should benefit as the others have."

Shares advanced 52 cents, or 2.7 percent, to $19.69.

Source: www.chicagotribune.com

Read more ...