Oracle Announced Investor Sweetener- Higher Quarterly Dividend & Increased Share Repurchase Program Fund.


Oracle Corporation released their Q4, FY13 result post US market close and it disappointed on revenue side. Revenue came at $ 11 Bn vs. analyst projection of $11.12Bn. The revenue growth experienced no growth mode whereas net profit increased from $3.5Bn to $3.8 Bn demonstrating tighter cost control implemented across business units. The interesting point of result revolved around Yearly free cash flow generation of $14.2 Bn (GAAP Basis) and allocation of additional $12 Bn in on-going share repurchase program which is going to be executed in number of quarters. Oracle also announced 100% increase in quarterly dividend to 0.12 US cents QoQ. The investor must read in between lines of result to reap maximum return out of it. The Revenue miss is because of hardware business unit even though Oracle in its press release stressed on Hardware unit impressive QoQ growth whereas hardware unit YoY growth is negative. The rest of the business unit clearly demonstrates their seamless strategy implementation. The additional fund allocation to existing share repurchase program offer insight about their confidence in on-going economic environment for next many quarter. None of the IT companies are going to allocate multibillion dollar in additional share repurchase if they smell any downturn on economy and prospects of IT sector.

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