Oracle Fulfills Its Annual Prophecy: Fool by Numbers
On June 26, software giant Oracle (Nasdaq: ORCL) released full-year 2007 earnings for the period ended May 31.
- Stable margins and a modest stock buyback program helped Oracle preserve the revenue gains all through the income statement.
- The company's penchant for growth by acquisition has reduced the cash balance and increased the debt load a bit. But the combined $1.1 billion hit doesn't hurt that much, considering that Oracle spent $5 billion on the year's mergers and acquisitions. Most of the funding came from the massive free cash flow.
- Management aims for 20% growth in earnings per share every year, and easily met and beat that target in 2007.
- Oracle has a Motley Fool CAPS rating of three stars (out of a potential five), while competitors Microsoft (Nasdaq: MSFT) and IBM (NYSE: IBM) carry two- and three-star ratings, respectively.
(Figures in millions, except per-share data)
Income Statement Highlights
|
FY 2007
|
FY 2006
|
Change
|
|
Sales
|
$17,996
|
$14,380
|
25.1%
|
|
Net Profit
|
$4,274
|
$3,381
|
26.4%
|
|
EPS
|
$0.81
|
$0.64
|
26.6%
|
|
Diluted Shares
|
5,269
|
5,287
|
(0.3%)
|
Get back to basics with the income statement.
Margin Checkup
|
FY 2007
|
FY 2006
|
Change*
|
|
Gross Margin
|
76.7%
|
77.5%
|
(0.8)
|
|
Operating Margin
|
33.2%
|
32.9%
|
0.3
|
|
Net Margin
|
23.8%
|
23.5%
|
0.2
|
*Expressed in percentage points.
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets
|
FY 2007
|
FY 2006
|
Change
|
|
Cash + ST Invest.
|
$7,020
|
$7,605
|
(7.7%)
|
|
Accounts Rec.
|
$4,074
|
$3,022
|
34.8%
|
|
Liabilities
|
FY 2007
|
FY 2006
|
Change
|
|
Accounts Payable
|
$315
|
$268
|
17.5%
|
|
Long-Term Debt
|
$6,235
|
$5,735
|
8.7%
|
The balance sheet reflects the company's health.
Cash Flow Highlights
|
FY 2007
|
FY 2006
|
Change
|
|
Cash From Ops.
|
$5,520
|
$4,541
|
21.6%
|
|
Capital Expenditures
|
$319
|
$236
|
35.2%
|
|
Free Cash Flow
|
$5,201
|
$4,305
|
20.8%
|
|
Owner Earnings
|
$5,241
|
$4,173
|
25.6%
|
Free cash flow is a Fool's best friend.
Related Foolishness:
Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.
At the time of publication, Anders Bylund had no position in any company mentioned. Microsoft is a Motley Fool Inside Value recommendation. Fool rules are here.
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