Oracle's amazing earnings call

Welcome to the future where companies are finally spending on IT. At last, it is like the past.

By Jim Cramer Dec 19, 2012 10:22AM

thestreet logocorbisI had to punch myself. It was almost as if it were a play staged among tech executives in a bygone era, one when you could expect stocks to gap up instantaneously and then never look back.

 

I'm talking about Tuesday night's Oracle (ORCL) conference call. There were record numbers everywhere; new software and cloud revenues were up 18%; and the U.S. business was on fire, up 22%. Europe was incredibly strong, with 12% growth and an expansion of headcount because there is so much business to take. How strong was Europe? It came in just a percentage point behind the great growth area that is Asia pacific.

 

Not only were those regions terrific, but get this. Remember that sound you are supposed to hear at the end of every tech year, the sound of a budget flushing as companies spend their information-technology dollars before they go away? You could hear it loud and clear on the Oracle quarter. It was just like the old days.

 

No, it was actually better. Get a listen to what Oracle co-founder and Chief Financial Officer Safra Catz had to say when she was asked about spending -- whether it's being crimped by the worries over the financial cliff:

 

"Well, as you can see in our numbers, people want to spend their budgets, continue to spend their budgets. We're having an absolutely wonderful December so far. So what's going on in Washington, I don't know who necessarily it is influencing today, but I can tell you our customers have been spending money with us, even in here in December."

 

Blown away.

It gets better. A few years back Oracle spent $7.5 billion to buy Sun Micro -- a deal that was initially perceived as offering some merit, but was subsequently criticized as a gigantic waste of money.

 

On this call, CEO Larry Ellison stuck a fork into that negativity by saying, "Sun has already proven to be the most strategic and profitable acquisition Oracle has ever made."

 

I am sure the skeptics will say, "Hold on, this hardware purchase has been a gross-margin killer for the software based in Oracle for years and years." But Ellison says the Java-programming software that came with Sun is what has made the deal a huge winner. Now that the hardware portion of the acquisition has been downsized, he expects the news from the Sun deal will just get better and better.

 

How is Oracle making all of this money? Who is spending? Oracle lays out a hefty list of customers for its engineered products, ones that are doing quite well. They including the United Arab Emirates, Expedia (EXPE), Macy's (M), U.S. Bancorp (USB), Chevron(CVX), Time Warner (TWX), Vodafone (VOD) and Wal-Mart (WMT).

 

When you hear those names you realize that there are companies with lots of money that are growing, and growing aggressively, and they are choosing Oracle to manage their numbers and their cloud migration. People are getting out of having their own dumb Intel (INTC) boxes and putting their data in the cloud, where it can be accessed more quickly and for cheaper.

 

Oracle made a big show of saying that it's taking share from SAP (SAP) in Europe, and that's something with whcih I would bet SAP co-CEO Bill Mcdermott would disagree. There was also a subtle undertone that suggested that Saleforce.com (CRM) is not doing as well as Oracle, either -- something I know Salesforce CEO Marc Benioff could dispute.

 

Whatever -- let's just say business is very strong, and cash is brimming at $34 billion. That's even despite some large-sized acquisitions and a buyback that's taken in 350 million shares, or $10 billion worth of stock.

 

At a time when the news headlines suggest a collapse in tech spending, Oracle is saying the opposite. It was an amazing, affirmative earnings call, and my hat is off to the entire team. We may have worries about Apple (AAPL) and we are concerned about personal computers. But, as for overall tech spending on big data and storage -- frankly, it's hard to be better than this. Welcome to the future. At last it is like the past.

 

Cramer's face 

 

Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and is long AAPL and CVX.

 

 

More from TheStreet.com

10Comments
Dec 19, 2012 11:08AM
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nice info, but it makes me wonder what the final products being developed are?  spyware?  consumer data collection?  or some other focus? 
Dec 19, 2012 11:36AM
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Big Brother is watching YOU !  The art of Privacy a long lost Freedom! Welcome to the 21st Century !
Dec 19, 2012 12:02PM
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GOOD THING WE HAVE CRAMER TO TELL US WHAT WE ALREADY KNOW ABOUT ORACLE
Dec 19, 2012 11:20AM
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IT is all about enterprises and it's not about Apple's gadget consumers. Dell, HP, IBM, Microsoft and SAP all thrive off of enterprise IT while selling the crumbs to consumer technology wannabees. If and when the global economies mend all enterprise IT suppliers will surge.
Dec 19, 2012 12:50PM
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"At some point during 2012 you may have heard or read news bits about a farm bill that determines legislation for agriculture and food policy. Congress failed to take action this year when it expired in September, and it appears the looming "fiscal cliff" may be a major determining factor in future dairy prices."

So impeach the Republican who pushed the ordinance through to ban cows in cities and bring 'em on in. No more grass cutting (saves the Ozone Layer and no gasoline) and we get natural not GMO. Sounds like a win... let the economy cave-in. Next doomsday prediction...
Dec 19, 2012 11:49AM
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BEWARE the SEC  is now indicting the street.com for accounting fraud

 

this shyster will be in jail ......the question is how long will MSN permit this pump and dump crook

to have access to this site?

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Well wait until the headlines are full of senior citizens dying in the street due to lack of S.S. and medicare money and we will see how the rest of us feel about the super rich getting even richer at our expensive.

 

It is going to be very very bad people. We have the resources and people to take very good care of our seniors yet even Obama is going to throw them to the wolves just because the super rich want to double the money they make now.

 

No Mas -- No Mas

 

Quote

"Well, as you can see in our numbers, people want to spend their budgets, continue to spend their budgets. We're having an absolutely wonderful December so far. So what's going on in Washington, I don't know who necessarily it is influencing today, but I can tell you our customers have been spending money with us, even in here in December."

 

Blown away.

End Quote

Dec 19, 2012 12:16PM
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I see us scrapping technology completely because grossly irresponsible people built a platform without considering it's hazard to Man and Earth. We fear nuclear proliferation and now we have the same potential with technology. When you know more about us then we do, you get your plug pulled permanently. A reminder that hacks like Acxion are under investigation. We don't need you.
Dec 19, 2012 7:53PM
Dec 19, 2012 10:42AM
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RIGHT ON CRAMER.I`ve made a to of money with his show.
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