Oracle Expected to Match Earnings Projections

Oracle’s earnings will be the last major report of this calendar quarter, or the first of the next quarter, depending on how you want to look at it. Being an enterprise firm, Oracle’s business runs differently than more consumer-oriented companies, and thus has different revenue patterns.

It is also the first quarter since the acquisition of Sun Microsystems, which CEO Larry Ellison promised would be profitable from the get-go. So what kind of earnings will Oracle’s release? Datamation offers a preview in advance of the official news.

Software giant Oracle, now a hardware company as well thanks to its purchase of Sun Microsystems, reports earnings on Thursday after the close of trading, and at least one analyst believes there will be no major surprises.

That’s good or not so good, depending on your perspective. It could be argued that Oracle’s (NASDAQ: ORCL) only significant competitor on a soup-to-nuts, hardware and software basis is IBM (NYSE: IBM). On the other hand, Oracle isn’t in a high-growth industry. Much of its growth has come from acquisitions in recent years, and there aren’t that many big targets left for it any more.

There’s also the added pressure on Oracle’s margins from Sun. As Broadpoint.AmTech analyst Yun Kim noted in a research note on the company earlier this month, Oracle currently enjoys the highest operating margin in the industry and is a relentless cost cutter.

Sun, however, is a hardware company, and hardware is not known for being a high margin business (with Apple a notable exception) and could cause “Oracle’s overall margin profile to decline substantially and it may be weighed down for some time while the company digests the acquisition,” Kim wrote.

Read the full story at Datamation:

Oracle Expected to Match Earnings Projections

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