Steady Demand Lifts Oracle

SAN FRANCISCO -- Oracle(ORCL) shares got a bounce Thursday after its strong second-quarter earnings report eased investor fears that business software sales were suffering from the challenging economic climate.

The stock was up $1.41, or 6.8%, to $22.17 on heavy volume in midday.

Oracle's strength comes from the continued growth in revenue as it consolidates the business software market, JMP Securities analyst Patrick Walravens wrote in a note Thursday.

Analysts at UBS and CIBC World Markets revised their target prices upward. UBS analyst Heather Bellini issued a one-year price target of $27 on the stock, matching the existing target of Goldman Sachs analyst Sarah Friar. Oracle is an investment banking client of Goldman Sachs. Disclosures for UBS and CIBC were not available.

The consensus analyst price target remains at $25, according to Thomson Financial.

While Oracle management acknowledged reasons to worry about the macro environment, executives said they had seen no indication of customers pulling back on business. Guidance for new license growth of 15% to 25% for the third quarter "underscores how healthy the company's pipeline and execution are currently," Friar wrote.

Co-president and CFO Safra Catz reported on Wednesday's conference call that third-quarter revenue should grow 21% to 24% year over year. She said to expect EPS, before items, of 29 cents or 30 cents. Second-quarter operating margin advanced to 41.3% from 38.8% in the prior year, Catz also said.