Oracle’s 1Q Earnings: Indicator For Whole Tech Sector?

The Redwood Shores, Calif.-based software vendor is expected to report net income of $2.67 billion, or 53 cents a share, compared with year-earlier net income of $2.47 billion, or 48 cents, analysts polled by Thomson Reuters estimate. Oracle’s revenue is expected to be essentially flat at $8.42 billion.

To be sure, the period ending Aug. 31 is often a slow time for many companies, with European customers on extended vacations.

As well, Oracle itself stages its annual Oracle World conference for developers and customers in the second quarter. It begins Sept. 30 in San Francisco. Founding CEO Larry Ellison is scheduled to speak that night to detail how the company’s “approach is changing the face of IT.”

Given Oracle’s presence in databases, as well as storage networks, a business strengthened by the 2010 acquisition of Sun Microsystems, the company ought to benefit from the need of its enterprise clients to manage and analyze more data than ever, especially with the new use of mobile platforms, from iPads from Apple (Nasdaq: AAPL), the world's most valuable technology company, to BlackBerry sets from Research in Motion (Nasdaq: RIMM).

Oracle, which reported cash and investments exceeding $30.7 billion, also keeps acquiring companies to broaden its versatility.

This week, it announced the acquisition of private SelectMinds of New York City for an undisclosed sum. The business social networking platform complements the earlier $1.2 billion acquisition of human resources software developer Taleo Corp. in February, as well as that of Vitrue, a specialist in corporate social marketing, for an undisclosed sum, in May.

Analyst Ross MacMillan of Jefferies advised clients that Oracle’s first-quarter results should meet estimates because it likely didn’t discount heavily and encountered new demand for business intelligence products.

Analyst Angelo Zino of Standard & Poor’s, who, like MacMillan, has a “hold” recommendation on the shares, said Oracle benefits from the breadth of its product line, acquisitions of cloud-based companies including RightNow Technologies as well as Taleo. But it’s also likely encountering more competition from IBM and software vendors that notably include No. 1 rival SAP (NYSE: SAP) of Germany, Europe’s biggest software company.

“Execution remains key, in our view,” said Zino. “And we have questions about integration and execution.”

Oracle shareholders ought to be pleased. For the year, shares have risen more than 27 percent, although they’re up only about 13 percent for the past 52 weeks.

CEO Ellison, who recently acquired a 98-percent interest in the Hawaiian island of Lanai for a sum reported to be as much as $900 million, maintains a ownership interest of 22.5 percent in the company.

Oracle shares fell a dime to $32.92 in late Wednesday trading. Their 52-week high is $33.81.