Oracle will meet its earnings . . . it has to

Oracle Corp. (NASDAQ:ORCL) is due to report tonight after the close. Consensus calls for $0.23 in earnings per share for the quarter ending Feb 28. Oracle has a unique fiscal year ending May 31. With that, Oracle sees momentum building for both the February and May quarters, and then tails off significantly for the August quarter.

Oracle is the worldwide leader in database software technology. It has a market share well north of 50%, and so far, the Oracle pricing structure has held up. It has near-obscene operating margins of 50%+ on the database business. While the database business has been the bread and butter for Oracle, the company has struggled with its applications software offerings.

Oracle has had a history of spotty, at best, research and development efforts for its applications business. The result has been Oracle's acquisitions of PeopleSoft and Seibel Systems with the idea being "if you cannot build it, buy it." Its acquired companies have been absorbed successfully and have provided the elusive growth Oracle has been lacking as the core database market has been growing under 10% per year.

On March 1, Oracle has announced its intentions to acquire Hyperion Solutions Corp. (NASDAQ:HYSL). Hyperion fills another research and development gap that Oracle has struggled with: business analytics. Business analytics should be a complimentary sale with database software.

Oracle will achieve its guided $0.23 per share tonight. Oracle would not announce a major acquisition like Hyperion, then have the audacity to blow the quarter.

Georges Yared is the author of Stop Losing Money Today and Baby Boomer Investing. Please visit www.georgesyared.com