Oracle beats - Thanks to the dollar exchange rate

http://biz.yahoo.com/ibd/080918/tech.html?.v=1

* Earnings beat expectations by 7% rising to $0.21 GAAP vs $0.16 last year
* Earnings rose 28% over last year to $1.08 B
* Sales rose 18% to $5.3B

Without a tax gain and the dollar exchange rate, the growth would have been negative.

1. Taxes are 1.2% lower this year versus last year. That generated $15M or $0.03 per share.

2. Exchange rates contributed another $0.05 EPS
- EU sales rose 20% to $1.9B. Of which $190M is from the US dollar being 10% weaker this quarter than last year.
- Asia Sales rose to ~$900M. Of which $90M (10%) is from dollar exchange rates

In fact, remove that dollar exchange rate gain and the Sales growth was a lackluster 11%.

The currency impact is so significant, that Oracle expects it to reduce sales growth by 3% next quarter. Why? Because the dollar is almost flat year over year.

They are forecasting ~10% growth next quarter after the currency issue is taken into account. And that includes the tax gain. So, in fact, Oracle is forecasting almost no growth next quarter.

It's hard to mistake the reality underlying the accounting one-offs. Business is flat at best. Which means it goes negative soon - probably Spring of next year.