Earnings Preview: Canaccord, Oppenheimer positive on Oracle ahead of Q3 report

theflyonthewall.com

Oracle (ORCL) is expected to report Q3 earnings after the bell on Wednesday, March 20, with a conference call scheduled for 5:00 pm ET. Oracle provides enterprise software and computer hardware products and services... EXPECTATIONS: Analysts are looking for a profit of 66c on revenue of $9.38B. The consensus range is 65c-70c for earnings per share and $9.27B-$9.58B for revenue, according to First Call. During its Q2 earnings conference call, Oracle said it expects Q3 adjusted EPS to be between 64c-68c. At that time the company also projected its Q3 adjusted revenue to be up 1%-5% from the prior year... LAST QUARTER: The company reported an adjusted operating margin of 47% for Q2. In breaking down its revenue, Oracle said its new software licenses revenue accounted for $2.4B, software license updates and product support revenues made up $4.3B and hardware systems products revenues were $734M... COMPANY NEWS: Soon after reporting its Q2 results, Oracle agreed to acquire Eloqua, a provider of cloud-based marketing automation and revenue performance management software, for $871M, net of Eloqua’s cash. More recently, Oracle agreed to buy Acme Packet (APKT), which enables the delivery of voice, data, services and applications across IP networks, for about $1.7B, net of Acme Packet's cash. The companies said the acquisition, which was announced February 4, is expected to close in the first half of 2013... STREET RESEARCH: Within the last week, two research firms have issued positive notes to investors on Oracle ahead of its earnings report. A week ago, Canaccord Genuity analyst Richard Davis said he expects the company to report middle to upper end of the range results for the quarter that just ended. The analyst added that hardware revenue should begin to increase year-over-year in the next quarter or two. The improving hardware picture, along with continued performance from the other segments of Oracle's business, should lead to an expansion of the multiple on the stock, contended Davis, who raised his rating to a Buy from a Hold and increased his price target on the shares to $42. Two days ago, Oppenheimer said it expects Oracle to report in-line Q3 results, but also believes the stock will advance following the report. Oppenheimer maintained its Outperform rating on the stock but increased its price target on the shares to $40 from $37... PRICE ACTION: In afternoon trading, Oracle shares are virtually unchanged at $35.70, underperforming the Nasdaq composite index, which is up about 0.7%. Since the day after its last earnings report, Oracle has advanced over 8.5%.

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