Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Steady IT Budgets Suggest a Positive Quarter for Oracle

Enterprise software giant Oracle will report quarterly earnings after the bell today, and analysts expect the results to be as positive as they have been in the previous several quarters.

Despite a wobbly economy, especially in Europe, IT spending seems to be holding steady. Brian Schwartz, an analyst with ThinkEquity, checked in with 16 IT industry contacts and asked about their spending plans for the coming year. The answers, he says, point to positive results in Oracle’s report today. “Contacts surveyed, on average, finished 1 percent above their plans in Q2 and estimate their customers’ overall IT budgets will grow about 3 percent in 2012,” Schwartz wrote in a note to clients on Dec. 15.

Also in Oracle’s favor: The priority in IT spending is shifting away from things that generate revenue and toward things that help control costs. “This transition could provide a nice tailwind for Oracle’s many cost-savings products around data-center consolidation,” Schwartz writes.

Of the 16 people surveyed, Schwartz says, seven were positive, five were neutral and four were negative. Those in the positive column said they expect their IT budgets to grow incrementally in 2012, and they seemed bullish on Oracle’s database and middleware offerings, which help reduce the overall footprint of their data centers. Those in the negative column cited uncertainty about Europe and the financial services sector. Some financial customers are cutting their spending on things like outside consultants, and sales cycles for certain products are growing longer.

The consensus view of Wall Street analysts calls for Oracle to report sales of $9.23 billion and a per-share profit of 57 cents. Schwartz rates Oracle a Buy with a $36 price target, which would amount to a 26 percent improvement over Monday’s closing price of $28.61. Oracle shares have fallen by a little less than 9 percent since the end of 2010.

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The problem with the Billionaire Savior phase of the newspaper collapse has always been that billionaires don’t tend to like the kind of authority-questioning journalism that upsets the status quo.

— Ryan Chittum, writing in the Columbia Journalism Review about the promise of Pierre Omidyar’s new media venture with Glenn Greenwald