NEW YORK (AP) - Shares of Oracle Corp. climbed in premarket trading Thursday after the business-software maker posted fiscal third-quarter profit and sales above Wall Street’s expectations amid healthy contract signings despite the economic downturn.
The Redwood City, Calif.-based company’s shares rose 7.4 percent to $17 in premarket trading, having closed at $15.83 on Wednesday.
Oracle also declared its first dividend, and Chief Executive Larry Ellison called the quarter’s results a “tremendous achievement” amid the global economic slowdown.
Jefferies analyst Ross MacMillan, who rates Oracle a “Buy,” said the company is “holding up better than most,” and while the effects of foreign-exchange ratios is hurting revenue, it is benefiting costs.
“(Oracle) has seen better fundamentals than most software companies so far this cycle and to date has reported decelerating but still positive license growth,” the analyst wrote in a note to investors. He raised his target price by a dollar to $19.
FBR analyst David M. Hilal kept an “Outperform” rating on Oracle and said the company is in a good position to weather the downturn.
“We continue to favor Oracle as a relative outperformer during this downturn because of its large base of recurring maintenance revenues, business diversity…earnings and cash flow stability, reasonable valuation, and introduction of a cash dividend,” the analyst wrote.
Hilal’s target price is $20.