Oracle Corp.'s (ORCL) second-quarter performance has made a lot of shareholders happy, as they increased their net income by 35 percent over last year, as corporations continued to spend on technology.
In its guidance, Oracle projected sales should increase between 15 to 25 percent during this quarter, continuing on in its strong momentum.
With the number of acquisitions over the last two years, Oracle has put itself into an enviable position, with some believing they're stronger than maybe all their rivals like IBM Corp. (IBM), SAP AG (SAP) and Microsoft (MSFT) which aren't lightweights by any means.
The performance of Oracle is impressive for no other reason than acquisitions could have definitely dragged down their profits, yet the company still performed this strongly. Even with the possibility of more acquisitions, they're predicting similar numbers as last quarter.
For the quarter, Oracle earned $1.3 billion, or 25 cents a share, for the period ending November 30. That's in contrast to the $967 million, or 18 cents a share they earned during the same period last year.
Revenue generated for the period was $5.31 billion, or 28 percent over last years' $4.16 billion. Expectations were for them to generate about $5.04 billion in revenue.
Some are already jumping on the bandwagon that maybe the technology sector won't be affected by a slowdown next year as expected, but that's a real stretch based only on Oracle's performance.
It may possibly show that the bigger players in the market may hold pretty well, but with a number of companies saying they're looking at cutting back on technology expenditures, it doesn't look like the overall industry will fare as well as the more established players.
In slower times and times of uncertainty, the larger companies are trusted more, and that will probably be the way it plays out over the next year or two. It will depend on how much of a niche a smaller company may fill as to how much they will be affected by the slowing economy.
What may even be better news as far as Oracle goes, is the strong increase in sales of software licenses, which is one of the metrics used for projecting potential future revenue, as it provides the environment to offer product service and upgrades on a fairly predictable level.
Either way you look at it, Oracle looks well-positioned and ready for whatever way the market turns. They should perform well for the foreseeable future.
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