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Oracle Gets Air Force Contract

The $89 million deal may add a penny to quarterly EPS.
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(ORCL) - Get Free Report

has been awarded an $89 million fixed-price contract by the U.S. Air Force to replace logistics systems.

The deal could add about a penny a share to pro forma EPS in the November quarter, according to JMP Securities Analyst Patrick Walravens.

The Expeditionary Combat Support System from Oracle will replace more than 500 logistics systems currently in use, according to an Air Force press release.

Analysts polled by Thomson First Call expect the giant software maker to earn 19 cents a share in the quarter.

Walravens said it isn't clear how the revenue will be recognized, but he believes it represents license and first-year maintenance that could be recognized in the current quarter.


(SAP) - Get Free Report

, the analyst said, competed unsuccessfully for the contract. "Oracle beat SAP due to a combination of factors, one of which was Oracle's ability to offer a software stack: i.e, a bundle of applications, database and middleware software. SAP does not have a database product and has only recently begun developing a middleware platform," he wrote in a note to clients. JMP does not have a banking relationship with Oracle.

Oracle is expected to discuss the contract during a luncheon with analysts later Monday. The company's shares were recently up 20 cents, or 1.6%, to $12.46.