Oracle Corporation (ORCL) Is Fighting Back

After missing two consecutive quarters of sales estimates, Oracle Corporation (NASDAQ:ORCL) executives blamed the company’s revenue shortfall on the economy, with its Asia-Pacific business suffering the biggest decline. However, with this series of major partnership announcements, Oracle is finally realizing that it needs to stay relevant and competitive as the landscape continues to shift toward web-based services. Oracle is stepping up with its cloud offering by converting two of its rivals to partners.

What now?

With these newly announced strategic partnerships and continuous improvement for its sales force execution, Oracle is still in the game. As for the hardware systems, management believes that growth in total hardware can be seen as early as Q1, 2014 and the high gross margin from hardware could help increase overall gross margins even more over time.

Oracle remains financially sound as its cash flow increased to $14.2 billion over last four quarters. The company now has $32.2 billion in cash and marketable securities. The company is also restarting its dividend earlier than planned while increasing quarterly dividend to $0.12 per share. Additionally, management has authorized a $12 billion share repurchase program.

Bottom line

With the recent pull back, it is a good opportunity to slowly accumulate Oracle Corporation (NASDAQ:ORCL) shares. By realizing its weakness and starting to strengthen its offerings by partnering with former rivals, Oracle shows its determination to stay competitive and boost its cloud offerings while transitioning to the cloud-based economic model.

Nick Chiu owns shares of Oracle. The Motley Fool recommends Salesforce.com. The Motley Fool owns shares of Microsoft and Oracle. Nick is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article Oracle Is Fighting Back originally appeared on Fool.com and is written by Nick Chiu.

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