Winter's almost gone, and another earnings season with it. But just as winter has a few days left to run its course, we still have a few big names left to report on the calendar -- notably, tech titan Oracle (NASDAQ:ORCL). The hometown hero of Redwood City, Calif., reports its fiscal Q3 2006 results after close of trading on Monday.

Wall Street Wisdom:

  • General consensus. One of the most popular stocks on the market, Oracle has 32 analysts following it. Within this crowd, you'll find only one seller. In fact, only eight analysts even hedge with a hold rating. Everyone else says you should buy Oracle.
  • Revenues. These are expected to rise in Q3. Analysts predict a 14% increase over last year's numbers, to $3.53 billion.
  • Earnings. Earnings are expected to rise a bit more slowly, up 12% to $0.18 per share.

Margin watch:
Oracle's stock has risen 35% since hitting a low of $10 per stub back in September 2004. Yet strangely, this rise in stock price has mirrored a slide in the company's profitability. Over the past 18 months, Oracle's rolling gross margin has dropped only 80 basis points, but its operating and net margins are down much more. Although Oracle remains one of the world's most profitable software companies, at last report it was 16% less profitable on the bottom line than it was back in the August 2004 quarter.

Margins %

8/04

11/04

2/05

5/05

8/05

11/05

Gross

77.6

78.2

77.9

77.5

77.2

76.8

Op.

39.3

40.6

38.7

37.1

35.7

33.6

Net

26.7

27.9

26

24.5

23.4

22.3
All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ending in the named months.

Foolish lookout:
Oracle closed its acquisition of smaller rival Siebel on Jan. 31. That same month, it announced plans to issue as much as $5 billion in debt to finance the purchase. So on Monday, expect to see Oracle's debt rise. Also likely on the rise: Oracle's expenses related to the 2,000 layoffs the company announced in connection with the merger last month. At the time, Oracle said these layoffs would take place over "the next few weeks." Therefore, at least some of the costs of the reduction in force should have been incurred during the third quarter, which ended on Feb. 28. Expect these and other merger-related costs to take a continuing toll on margins on Monday.

Competitors:
Oracle's competition ranges from the large to the very large, including companies such as Germany's SAP (NYSE:SAP), as well as Microsoft (NASDAQ:MSFT), IBM (NYSE:IBM), and Salesforce.com (NYSE:CRM) here at home.

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Fool contributor Rich Smith has no interest, short or long, in any company named above.