Oracle Surges Despite Revenue Miss

Shares of database giant Oracle(ORCL Quote) rose Friday as investors shrugged off the firm's second-quarter revenue miss and the effects of the strengthening dollar.

For the second quarter of fiscal 2009, Oracle posted revenue of $5.6 billion, a 5% increase from the same period last year, although that was below analysts' estimate of $5.84 billion.

Oracle's stock nonetheless rose $1.22, or 7.3%, to $17.83, underlining investors' continuing faith in the company, which has been battling both a rising greenback and a weakening global economy.

During the second quarter, software revenue grew 8% year-over-year, although new license sales, which is a key indicator of Oracle's performance, were down 3%. Oracle's revenue from services fell 2% year-over-year.

Analyst firm JMP Securities maintained its market perform rating on Oracle in a note released Friday, but warned that the software giant is feeling the effects of the recession.

"Putting aside all the noise about exchange rates, the key observation, in our opinion, is that Oracle's business is grinding down along with the economy," wrote JMP Securities analyst Pat Walravens.

Walravens explained that, on a constant currency basis, Oracle's license revenue grew 5% year-over-year in the second quarter, compared with 10% and 20% growth rates in the previous quarters.

For the third quarter, Oracle issued earnings guidance between 31 cents and 33 cents, below analysts' estimate of 34 cents. The company expects third-quarter revenue of $5.43 billion to $5.59 billion, short of the consensus of $5.84 billion.

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