Oracle's Fourth Quarter Will Be Tough to Top

SAN FRANCISCO -- Cynics may have scoffed when Oracle(ORCL Quote - Cramer on ORCL - Stock Picks) executives promised a comeback after disappointing investors last quarter.

It turns out Oracle was true to its word. The company's bang-up fourth quarter that ended in May was partly due to recapturing deals it failed to close in the third quarter, suggests Stuart Williams, buy-side analyst with Technology Business Research.

"Oracle likely closed multiple deals that slipped out of the previous quarter," when applications revenue fell short of expectations, Williams wrote in a note late Wednesday.

That is just one of the factors that beefed up Oracle's top line in its final quarter of fiscal 2008. Another, said CFO Safra Catz on the conference call Wednesday, was the company's extremely conservative guidance for the fourth quarter due to the bleak macroeconomic picture. But she said those conservative assumptions had turned out to be unnecessary.

They Just Don't Get Oracle!

Williams believes Oracle also benefited from a weak U.S. dollar, which made its software more attractive abroad where it achieved growth rates as high as 34.5% for Europe and the Middle East.

Currency exchange accounted for 6 percentage points of top-line growth, according to Catz.

And the prospect of price hikes at the beginning of the new fiscal year may have spurred some prospective clients to jump in before they took effect, Williams wrote.

All these factors add up to a performance that is not likely to repeat in the first quarter of 2009.

Overall, the results presented the picture of a well-oiled machine chugging along the tracks and gaining steam.

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