Read Oracle's Tea Leaves: Fool by Numbers
By Anders Bylund
December 20, 2007
On Dec. 19, enterprise software behemoth Oracle (Nasdaq: ORCL) released second-quarter 2008 earnings for the period ending Nov. 30.
- Sales of business applications outpaced databases and middleware all over the globe, but no single outstanding product category or geographic market fueled the growth this time.
- Margins are inching upward as Oracle's economies of scale kick in.
- When it comes to winning approval from our CAPS community, Oracle leads a closely contested business-software race. Is that fair? Weigh in today with your opinion of Oracle, its competitors, or any other company.
(Figures in millions, except per-share data)
Income Statement Highlights
|
Q2 2008
|
Q2 2007
|
Change
|
|
Sales
|
$5,313
|
$4,163
|
27.6%
|
|
Net Profit
|
$1,303
|
$967
|
34.7%
|
|
EPS
|
$0.25
|
$0.18
|
38.9%
|
|
Diluted Shares
|
5,232
|
5,287
|
(1.0%)
|
Get back to basics with the income statement.
Margin Checkup
|
Q2 2008
|
Q2 2007
|
Change*
|
|
Gross Margin
|
76.7%
|
75.4%
|
1.3
|
|
Operating Margin
|
33.5%
|
32.6%
|
0.9
|
|
Net Margin
|
24.5%
|
23.2%
|
1.3
|
*Expressed in percentage points.
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets
|
Q2 2008
|
Q2 2007
|
Change
|
|
Cash + ST Invest.
|
$8,432
|
$7,825
|
7.8%
|
|
Accounts Rec.
|
$3,264
|
$2,543
|
28.4%
|
|
Liabilities
|
Q2 2008
|
Q2 2007
|
Change
|
|
Accounts Payable
|
$346
|
$284
|
21.8%
|
|
Long-Term Debt
|
$6,236
|
$5,735
|
8.7%
|
The balance sheet reflects the company's health.
Cash Flow Highlights
|
Q2 2008
|
Q2 2007
|
Change
|
|
Cash From Ops.
|
$602
|
$243
|
147.7%
|
|
Capital Expenditures
|
$69
|
$57
|
21.1%
|
|
Free Cash Flow
|
$533
|
$186
|
186.6%
|
|
Owner Earnings
|
$1,594
|
$1,178
|
35.3%
|
Free cash flow is a Fool's best friend.
Competitive Context
|
Market Cap
|
Trailing P/E Ratio
|
CAPS Rating
|
|
Microsoft (Nasdaq: MSFT)
|
$329,690
|
23.1
|
***
|
|
IBM (NYSE: IBM)
|
$149,330
|
16.0
|
***
|
|
Oracle
|
$113,890
|
26.2
|
****
|
|
SAP AG (NYSE: SAP)
|
$61,360
|
21.8
|
***
|
|
Sun Microsystems (Nasdaq: JAVA)
|
$15,690
|
27.7
|
***
|
Using the latest reported numbers from Capital IQ.
Keep your partners close and the competition in your vest pocket.
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