Enterprise software maker Oracle Corporation (ORCL) said late Tuesday that its fiscal fourth quarter profit fell 7% from last year, but results still beat expectations.
The Redwood City, California-based company reported fiscal fourth quarter net income of $1.89 billion, or 38 cents per share, compared with $2.04 billion, or 39 cents per share, in the year-ago period. Excluding one-time items, Oracle posted an adjusted profit of 46 cents per share.
Sales fell 4% from the same quarter last year to $6.86 billion.
On average, Wall Street analysts expected a lower profit of 44 cents per share on $6.4 billion in revenue.
New software license sales dropped 13% from year-ago levels to $2.74 billion, a sign that Oracle's customers are holding off in buying new versions of the company's proprietary software. License updates and product support grew 8%, however, to $3.05 billion.
The company is currently working to close a $7.4 billion acquisition of JAVA software maker Sun Microsystems.
As for the full fiscal year, Oracle said it saw a profit of $5.59 billion, on sales of $23.25 billion.
Looking ahead, Oracle said it expects revenue for the current first quarter to fall 1% to 4% from last year-'s levels, while analysts expect a 5% drop. The company predicted a first quarter profit of 29 cents to 31 cents per share, excluding items, while analysts currently see 30 cents per share.
Oracle shares rose $1.47, or +7.4%, in morning trading Wednesday.
The Bottom Line
We have avoided shares of ORCL since our initial coverage began on Mar.19, when the stock was trading at $17.37. The stock has acted pretty well since. The company has a dividend yield of 1.01%, based on last night's closing stock price of $19.87. Current technical support levels are around the $17.50-18.00 price levels. If the shares can firm up, we see overhead resistance around the $21.00-$23.50 price levels. We would remain on the sidelines for now, but we are watching the shares very closely.
Oracle Corporation (ORCL) is not recommended at this time, holding a Dividend.com DARS Rating of 3.2 out of 5 stars.
Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.
Tom Reese/Paul Rubillo, Dividend.com
