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Ahead of the Bell: Oracle's 3Q provides tech gauge

REDWOOD SHORES, Calif. (AP) -- Oracle's latest quarterly report should provide some clues on whether technology spending is picking up as U.S. employers expand their payrolls.

The results, due out after the stock market closes Wednesday, will provide the most extensive reading yet on this year's technology spending patterns. Oracle's fiscal third quarter spans from December through February. Most other major technology companies so far this year only have reported through results for quarters ending in December or January.

Oracle Corp. is one of the world's largest makers of business software, making it a closely watched bellwether for gauging the state of the industry.

U.S. companies added more jobs than most analysts anticipated during the first two months of this year, a sign they are feeling more confident about their prospects, despite the still-fragile state of the U.S. economy.

Even if Oracle fared well in the U.S., Oracle's quarter could still turn out to be a letdown if the company ran into trouble in other parts of the world, particularly in Europe's hobbled economy. The company also could be hurt by tougher competition from smaller rivals that specialized in leasing software as an online subscription service that can be accessed on any Internet-connected device. The approach, known as "cloud computing," is a departure from Oracle's emphasis on selling software that is installed on individual computers maintained on the buyer's premises.

Another key to the quarter will be the growth of Oracle's new software licenses and online subscriptions. Management predicted a year-over-year gain of 3 percent to 13 percent in this category, which is closely watched by investors because it reflects the current demand for a software maker's products.

Analysts surveyed by FactSet expect Oracle's adjusted earnings to rise about 6 percent from last year to 66 cents per share. Analysts expect Oracle's revenue edged up 4 percent to nearly $9.4 billion.