(Updates stock price)
Shares of database giant
surged Wednesday as investors responded to the firm's solid
The Redwood Shores, Calif.-based firm beat Wall Street's
, despite seeing a dip in both revenue and profit.
Oracle's stock climbed $1.39, or 7%, to $21.26 in trading Wednesday, outpacing the broader rally in tech stocks that saw the Nasdaq rose 1.55%.
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The software maker's fourth quarter could spell good news for other tech stocks entering earnings season. Larry Ellison's firm is seen as something of a bellwether for software firms wrestling with the effects of a turbulent economy.
Oracle enjoyed a record operating margin of 51% during its fourth quarter, and also issued bullish first-quarter guidance. The company expects revenue around of $5.4 billion and non-GAAP earnings between 31 and 33 cents a share in constant currency. Analysts had expected sales of $5.15 billion and earnings of 30 cents a share.
At least one analyst feels that Oracle, which is in the middle of its $7.4 billion
( JAVA), has side-stepped the worst of the global economic crisis.
"Oracle continues to execute very well given the spending environment andrelative to competition," wrote Ross MacMillan, an analyst at Jefferies & Company, in a note released Tuesday. "The company has a number of major new product releases over the next year, and has a big accretion event from the Sun Microsystems acquisition."
The analyst, who reiterated his Oracle "buy" rating and $24 price target, added that the company's future looks bright.
"We continue to feel good about Oracle's strategy as it enters the next phase, despite the higher risk surrounding the Sun acquisition," he wrote. "As the battle for the data center heats up, Oracle is laying out its strategy for integrated solutions."
Oracle outlined this product strategy during a conference call late Tuesday.
The firm's Exadata storage server, in particular, is gaining momentum, according to CEO Ellison. Launched last year in conjunction with
, Oracle is touting its Exadata hardware and software as a way for firms to quickly handle large volumes of data.
"Exadata is shaping up to be our most exciting and successful new product introduction in Oracle's 30-year history," said Ellison, adding that the server is winning deals against rivals
. "We think we're a lot faster than the competition."
Early adopters of the Exadata product include
Research In Motion
and a "well-known" Californian smartphone and computer manufacturer, he said.
Oracle is also looking to bolster its hardware strategy with its
of Sun Microsystems, which is expected to close during the summer.
With Sun shareholders due to
on the buyout next month, Oracle did not reveal roadmap specifics during the conference call, but executives reiterated their commitment to mixing hardware and software.
"It's clear that cost pressures and increasing complexity are all catalysts right now causing customers to adopt pre-integrated products," said Charles Phillips, the Oracle co-president, in response to an analyst's question. "The Sun acquisition is a continuation of that strategy, and we've had very positive response from lots of customers because they know we'll make it all work together at the factory and we'll lower their cost."
Phillips was a little more forthcoming on Oracle's own technology, explaining the firm is planning a major launch of its middleware, which connects different software packages and applications.
"We are rolling out a major new release next week called Fusion Middleware 11G," he explained. "We'll launch that in Washington, DC and eight other cities around the world and then we'll follow-on with a tour in 107 cities."
Other new versions of the Fusion software are expected during this fiscal year, according to Patrick Walravens, an analyst at JMP Securities, who maintained a "market perform" rating on Oracle on Tuesday.
"We expect investors to focus on the Sun acquisition and its margin implications, the introduction of the new Fusion applications set for delivery next year, and how fast Oracle can get the compensation plans out to its sales force for the first quarter of fiscal 2010," he wrote, in a note.