Oracle comforted distraught investment bankers yesterday by delivering better-than-expected first quarter profits and pointing out it really doesn’t do that much business in the financial services sector.
The database giant turned in revenues up 18 per cent to $5.3bn for the quarter ending August 31, producing a net profit of $1.08bn, up 28.2 per cent on the year.
Once the numbers were squeezed through the non-GAAP mangle, this translated into earnings per share of $0.29, ahead of the $0.27 per share Wall Street had been expecting.
Apart from illustrating that bankers occasionally get befuddled when it comes to sums, the better-than-expected EPS figure offset the fact that revenues were slightly under Wall St’s target of $5.42bn.
Over the last few decades we’ve become accustomed to companies like Oracle talking up their business in the financial sector in their earnings calls. What better way to connect with those masters of the universe who can make life difficult, even for a colossus like Larry Ellison?
Yesterday presented the bizarre spectacle of CFO Safra Catz talking down the company's financial business.
According to a transcript of the earnings call on the Seeking Alpha website, Catz told the analysts: “As I said at analyst day, our exposure to banking customers globally is in the low single digits. Our exposure to US banks is even lower. The US banking and mortgage situation has been playing out for months and we do not believe that it should have a material impact on our performance for the quarter."
Catz added that: “We’ve reviewed our exposure to financial institutions who are reported to be facing significant asset impairment and liquidity risk and have concluded that our exposure is de minimis and immaterial.”
CEO Chuck Phillips even went so far as to highlight the strength of its business in the utilities and tax business – how utterly unsexy can you get?
Still, the company can’t totally avoid the financial world, and Catz warned of the impact of the strengthening dollar and said currency volatility could throw its results out.
The company expects revenues in the current quarter to be up 12 per cent to 15 per cent on last year’s $5.36bn in constant currencies and 9 per cent to 12 per cent at the current rate. On the same basis, earnings per share would be $0.35 to $0.36 at the current rate. ®