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Oracle
Oracle CEO Larry Ellison has spent nearly $24 billion over the past three years on 30 acquisitions, partly in an effort to match German software giant SAP’s heft in the corporate applications market. That investment helped Oracle boost sales by more than 50% during the same period. Initially it didn’t win the company favor with investors, who worried that melding all those companies into a smooth-running machine and coming out with an integrated suite of products was more than the software giant could handle. Those fears have eased recently—in part because Oracle boosted annual earnings per share by more than 20% and has gained share against SAP. One of the brightest spots: software packages for retailers. Sales grew more than 300% in Oracle’s second fiscal quarter, though off a small base a year earlier. “Within a year,” says Ellison, “we think the retail business is going to be big enough...to actually move the needle.”
| Overall Grade | A |
|
| Market Data | ORCL | |
| Market Value (2/28/2007) |
$85.1 Billion |
|
| Profitability* | 38.8% | A |
| Sales Growth Rate** | 18.7% | B- |
| 12-Month Sales | $16.1 Billion |
|
| 12-Month Net Income | $3.7 Billion |
|
| Total Return | Past 12 Months32.3% | Past 36 Months27.7% |
| Economic Sector | Information Technology | |
| Industry | Systems Software | |
The overall sector letter grade reflects how the weighted average of the return on income, or return on equity, and sales growth grades compare with others in the same sector. For the overall grade as well as the ROE/ROI and sales growth grades, an "A" places a company in the top 7% of its sector and an "A-" in the top 14% of the sector. The actual ranking was done using the underlying numerical measures. Grades are for information only.
* For nonfinancial companies, three-year average pretax operating profit before interest and special items as a percentage of average invested capital. For financial companies, pretax profits as a percentage of average shareholder's equity.
*Three-year average annual sales growth based on the most recently reported 36 months, calculated using the least-squares method.
$FOOTNOTE
