Oracle Can Continue to Grow With Data and Cloud, CFO Says

Oracle Corp. (ORCL) co-President and Chief Financial Officer Safra Catz said the company can sustain its growth rate by offering products for businesses to analyze information and do more of their computing over the Internet.

Oracle, the world’s largest supplier of database software and second-largest maker of business applications, can continue profit growth of 20 percent seen during the past seven years, Catz said at a meeting with financial analysts in San Francisco.

“We’re extremely confident about the different product lines we have and their ability to grow fast,” Catz said at the end of OpenWorld, Oracle’s annual convention.

After spending more than $50 billion on more than 80 deals in an acquisition spree since the middle of last decade, fueling an expansion in sales and earnings, Oracle is betting that growth will come from its array of products. Chief Executive Officer Larry Ellison unveiled a high-end server this week with more memory and the first update of its flagship database in five years.

While Oracle’s earnings per share, excluding some items, grew an average of 20 percent from 2006 to 2012, and sales rose 18 percent on average, analysts are expecting a period of slower gains, according to data compiled by Bloomberg. For the next two fiscal years through May 2014, per-share profit is expected to increase less than 10 percent. Revenue is expected to grow no more than 7 percent in each of those years.

Compound Growth

“For the last seven years it’s been a 20 percent compounded annual growth rate. There’s nothing standing between us now and doing that again,” Catz said, referring to earnings per share.

Ellison said earlier this week in an interview with CNBC Oracle would eschew large acquisitions in the near term while it concentrates on organic growth.

“They want to be a double-digit grower, but without large deals it’s going to be tough,” Brent Thill, an analyst at UBS AG in San Francisco, said in an interview at the event, referring to revenue. Thill has a buy rating on the shares.

In an address earlier today at the company’s OpenWorld conference here, co-President Mark Hurd said the volume of data around the world could multiply by 50 times before 2020, creating an opportunity for the database maker to sell to businesses that want to control the cost of analyzing information.

Big Data

More than 100,000 organizations will be storing at least one petabyte of data -- that’s 1,000 terabytes -- eight years from now, Hurd said in an address at the conference. During a demonstration on stage, he showed how Oracle software can aggregate police data with information on social media sites to improve law enforcement.

“This is a good example of merging unstructured and structured data together, doing it in real time,” Hurd told the audience. He said the analysis can be performed by “average folks -- we didn’t have power analysts.”

Shares of Redwood City, California-based Oracle rose less than 1 percent to $31.90 at the close in New York. The stock is up 24 percent so far this year.

To contact the reporter on this story: Aaron Ricadela in San Francisco at aricadela@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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