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Thursday, September 8, 2011

Oracle to Announce Earnings on Tuesday, September 20 (Financial Charts) *Financial Performance Review* ORCL

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Oracle (ORCL) will report FY Q1, QE August 2011, financial results on Tuesday, September 20
*Update 1 on 9-19-11*


Oracle (ORCL) Financial Performance Review

Oracle will report QE August 2011 financial results on Tuesday, September 20, after market closeThe conference call will be at 2:00 p.m. PT.

Oracle financial performance charts for prior quarters have been posted on the Oracle Financial Performance page along with additional quarterly commentary and will be updated for this next quarterly report. The charts are also lower in this post.

The Oracle financial performance charts are:
Oracle Performance by the Quarters
Earnings per Share (Diluted)
Cash Flow per Share from Operations (Diluted)
Total Revenues, Operating Income, Net Income
Gross Margin, Operating Margin, Net Margin
Return on Assets
Total Revenues and Earnings per Share Growth Rates
Revenue Sources
Geographic Revenues
Operating Expense Ratio


Oracle (ORCL) Future and Past Financial Performance

Earnings per Share
Yahoo Finance analysts' estimates QE August 2011: Non-GAAP $0.47 avg, $0.45 low, $0.48 high, 36 analysts
Prior Quarter QE May 2011: Non-GAAP  $0.75, GAAP $0.62
Prior Year QE August 2010: Non-GAAP $0.42, GAAP  $0.27
Oracle Outlook Non-GAAP $0.45 to $0.48, GAAP $0.33 to $0.36
The analysts' average Non-GAAP Earnings Per Share estimate for QE August 2011 of $0.47 is reasonable. Oracle has already announced the Non-GAAP earnings per share is estimated at $0.45 to $0.48, which is a decrease from prior quarter QE May 2011 of $0.75 and an increase from the prior year QE August 2010 of $0.42.

Total Revenues
Yahoo Finance analysts' estimates QE August 2011: Non-GAAP $8.36B avg, $8.11B low, $8.47B high, 35 analysts
Prior Quarter QE May 2011: Non-GAAP $10.81B, GAAP $10.78B
Prior Year QE August 2010: Non-GAAP $7.59B, GAAP $7.50B
Oracle Outlook Does not provide guidance
The analysts' average Non-GAAP Total Revenues of $8.36B is lower than prior QE May 2011 but higher than prior year QE August 2010.

Prior QE May 2011 Financial Results
When Oracle reports QE August 2011, the 3 months ended August, financial results on September 20, Oracle is expected to beat, match, or miss various QE May 2011 results. These financial results are charted on the Oracle Financial Performance page and lower in this post. Oracle for QE May 2011, the 3 months ended May, financial results were:
GAAP
Total Revenues $10.78B
Operating Income $4.36B
Net Income $3.21B
Earnings per Share $0.62
Gross Profit Margin 79.86%
Operating Income Margin 40.45%
Net Income Margin 29.78%

Summary
The QE August is typically a weaker quarter for Oracle, following the QE May which is the strongest quarter. Therefore, Oracle is not expected to beat prior QE May 2011 financial results, but is expected to beat prior year QE August 2010. Oracle has already announced through their outlook that QE August 2011 will be a decrease from QE May 2011 on both GAAP and Non-GAAP earnings per share. Oracle will miss QE May 2011 on GAAP Total Revenues, Operating Income, Net Income, and Earnings per Share per their own outlook. Oracle should meet or be close on GAAP Gross Margin, Operating Income Margin, and Net Income Margin. The detailed quarter by quarter charts are on the Oracle Financial Performance page and below.



Oracle Financial Performance by the Quarters (Charts)

Oracle Earnings Per Share Below is a chart of quarterly earnings per share. Current Earnings per Share of $0.62 are up +51% QoQ and up +35% YoY and are a multi-year, if not all-time, high. The prior peaks have been the QE May 2010 of $0.46 and QE May 2009 at $0.38. The QE May is the strongest quarter for Oracle. These peaks indicate an annual cyclical nature to Oracle's business. The low has been $0.22 for QE August 2009.


Oracle Cash Flow per Share Below is a chart of cash flow from operations per share. Current Cash Flow per Share of $2.17 is very strong and increased 5 consecutive quarters. The lows have been QE February 2009 of $1.62 and QE February 2010 of $1.61.


Oracle Total Revenues, Operating Income, and Net Income Below is a chart of quarterly total revenues, operating income, and net income. Current Total Revenues of $10.78B is a record high, up +23% QoQ and +13% YoY. Total Revenues have increased 3 consecutive quarters and 6 of the past 7 quarters. Current Operating Income of $4.36B is also a record high and has increased 3 consecutive quarters and 4 of the past 5 quarters. Net Income of $3.21B is also a record high, up +52% QoQ and +36% YoY. Net Income has increased 3 consecutive quarters and 4 of the past 5 quarters.


Oracle Gross Margin, Operating Margin, and Net Margin Below is a chart of quarterly gross margin, operating margin, and net margin. Current Gross Margin (see note below) of 79.86% is a 6-quarter high. Current Operating Margin of 40.45% is very strong and is a multi-year, if not all-time, high. Current Net Margin of 29.78% is also very strong and a multi-year, if not all-time, high. The average income tax rate of 23.05% is a multi-year low and boosted the net margin. [Note: Oracle does not report a gross profit, but includes some allocated cost of revenues in operating expenses as line items. For this analysis, these allocated cost of revenues have been reclassified as cost of revenues and operating expenses are therefore the commonly reported line items of most companies. The gross profit reviewed is not a true gross profit. Operating margin and net margin are not affected by this reclassification.]


Oracle Return on Assets Below is a chart of annual return on average assets per quarter. The total net income for the most recent 4 quarters is divided into average assets for the most recent 4 quarters to obtain a rolling annualized ROA, an annualized return on average assets for the 12 months (4 quarters) ended. Current Return on Assets of +12.75% is historically very strong and has increased 3 consecutive quarters.


Oracle Growth Rates Below is a chart of the quarterly (QoQ, Q/Q, quarterly change) growth rates for total revenues and earnings per share. Current Total Revenues of +23% are a 4-quarter high, the 3rd consecutive quarterly increase, and the 6th increase in the past 7 quarters. Current Earnings per Share of +51% is also a 4-quarter high, the 3rd consecutive quarterly increase, and the 4th increase in the past 5 quarters.


Oracle Revenue Sources Below is a chart of quarterly revenue sources, as a percentage of total revenues. The trend is clearly an increase in Software offset by decreases in Hardware and Service.


Oracle Geographic Revenues Below is a chart of quarterly geographic revenues, as a percentage of total revenues. The trend is an increase in Europe, Middle East, Africa offset by decreases in Americas and Asia Pacific.


Oracle Operating Expense Ratio Below is a chart of quarterly operating expense ratio, which is operating expenses divided by total revenues. The current Operating Expense Ratio of 39.41% is a multi-year low and below the chart average, since QE August 2009, of 44.05%. This indicates increased efficiency plus a higher proportion of revenues is reaching the bottom line, net income, and earnings per share.



About Oracle
Oracle provides the world’s most complete, open, and integrated business software and hardware systems, with more than 370,000 customers - including 100 of the Fortune 100 - representing a variety of sizes and industries in more than 145 countries around the globe. Oracle's product strategy provides flexibility and choice to our customers across their IT infrastructure. Now, with Sun server, storage, operating-system, and virtualization technology, Oracle is the only vendor able to offer a complete technology stack in which every layer is integrated to work together as a single system. In addition, Oracle's open architecture and multiple operating-system options gives our customers unmatched benefits from industry-leading products, including excellent system availability, scalability, energy efficiency, powerful performance, and low total cost of ownership


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