Oracle results ease IT spending worries
(Reuters) - Oracle Corp's strong results would help pacify investors worried about macroeconomic weaknesses hurting the world's No. 3 software maker, and the departure of a senior sales executive, analysts said.
Oracle reported stronger-than-expected quarterly results on Monday as sales of new software licenses jumped. It also announced an extra $10 billion in share buybacks.
The company reported results much before schedule after news of the pending departure of a senior sales executive Keith Block fueled concerns that business was stagnating.
"Oracle's results, in our opinion, support our independently derived view that IT buyers are not panicking and they are not slashing budgets - this includes deservedly maligned Europe," Canaccord Genuity analyst Richard Davis said.
Oracle, whose chief rivals are Hewlett-Packard Co, Microsoft Corp and International Business Machines Corp, said new software sales growth in the current quarter should be flat to 10 percent higher, despite fears of further weakening in technology spending.
"We see the stock returning to strength as this quarter dispels multiple concerns - over the European situation, sales organization changes, slowing appliance momentum, slowing apps support revenue growth," Citi analyst Walter Pritchard said.
Shares of the company, which touched a high of $28.75, were trading up 2.5 percent at $27.84 on Tuesday morning on the Nasdaq.
(Reporting by Megha Mandavia in Bangalore; Editing by Sriraj Kalluvila)
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