Wall Street took heart from a report showing better-than-expected earnings from Oracle, the Silicon Valley software giant. Technology stocks have been on a roll this spring, and investors eyed Oracle’s fourth-quarter report on June 23 for signs the rally might continue.
Sales, profits, and new software bookings for Oracle’s fiscal fourth quarter ended on May 31 exceeded Wall Street’s forecasts. That sent shares of Oracle up 2.7 percent in extended trading, after closing on June 23 down 10 percent, or 0.5 percent, at $19.87. The shares have gained 8.8 percent in the past three months.
Profits declined 7 percent and revenues fell 5 percent in the period, though results would have been better if not for the effects of translating overseas sales into a rising U.S. currency. On Wall Street, analysts said Oracle’s recurring revenues from technical support contracts and prudent control of expenses during the quarter helped offset currency-related declines. “Oracle continues to be a high-quality investment,” says Andy Miedler, a senior technology analyst at Edward Jones who rates Oracle a “buy.”
Pickup in Software Sales
Investors are lifting the shares of tech outfits including IBM, Google, Microsoft, and Adobe Systems that reported relatively healthy results during the recession by taking advantage of companies’ need to buy products that can boost productivity, Miedler says. “Investors see tech companies posting fairly decent results in this environment, and they’re rewarding them for it,” he says. The Nasdaq composite index has risen 13.4 percent since Mar. 24, outpacing other indices.
Oracle executives told Wall Street analysts in a conference call that customers are beginning to buy more software, and pointed to deals closed during the quarter with Wal-Mart, American Express, Vodafone Group, and Perry Ellis. “The sense of panic and deer-in-the-headlights kind of feeling” has subsided, said Oracle President Charles Phillips.
For the fourth quarter, Oracle earned $1.9…