Some Companies Just Get It

20 March 2009

Oracle gets it.

Oracle announced its Q3 earnings on Wednesday.  They surprised the Street by exceeding expectations and issuing guidance that at least one analyst referred to as “prudently cautious”.  But that’s not what stands out for me.  What stands out for me is the introduction of a dividend.

Typically, growth oriented companies hesitated to introduce dividends because if often signaled that a company was moving away from growth and more towards maintenance of its current revenue streams.  One may argue that Oracle traditionally thought of dividends in this way.  But times have changed and Oracle is changing along with it.

Investors these days are clearly looking for safety and income.  They wanted a dividend from Oracle and that’s exactly what Oracle gave them.

Let us never forget that the investors of our companies are the owners of our companies.  Sometimes, just sometimes, it’s a good idea to listen to them.

2 Responses to “Some Companies Just Get It”

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  2. Michele Nix

    Anil – thanks for this post. I agree. Oracle made a good, clean move against the backdrop of the financial crisis. Investors are the owners; and in these times, their voices hold more sway on matters of transparency, ethics, accountability and management. Investors have declared a seat at the leadership table, and wise companies are learning from the many giants who’ve fallen in the last year or so, and asking their investors, albeit figuratively, to pull up a chair. The important point is that they’re listening and that’s good business.

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