Oracle Corporation (TM) reported strong third quarter results, which beat the Zacks Consensus Estimate by $0.04. Robust results were primarily driven by strong revenue growth and new software sales were encouraging. The company also provided a robust fourth quarter 2011 outlook.
Given the improving prospects, we have raised our estimates for the fourth quarter, fiscal 2011 and fiscal 2012 by 6.2%, 4.0% and 3.6%, respectively. We believe Oracle will continue to benefit from its dominant position in the database management and software market.
We are positive on Oracle's longer-term growth prospects, given its growing market share, cost-saving initiatives, focus on improving profitability, new product pipeline and solid free cash flow. We maintain our Outperform rating and raise our target price from $37.00 to $41.00.
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