PREVIEW-Oracle results to set bar for tech rebound

* Oracle reports Q3 results on March 25 after market close

* Stock near nine-year highs on tech spending recovery

* Analysts expect Oracle to meet or beat Wall St estimates

* Wild card is Sun, which pits Oracle against new rivals

* Shares up 1.75 pct

By Jim Finkle

BOSTON, March 22 (Reuters) - Oracle Corp (ORCL.O) is likely to stoke expectations that technology spending is on the mend when it reports results this Thursday, with analysts expecting rising sales at the world's No. 3 software maker.

At least half a dozen software analysts expect Oracle to meet or beat Wall Street expectations for its fiscal third quarter ended Feb. 28, which call for earnings per share of 38 cents, excluding items, versus 35 cents a year ago.

The company, run by billionaire Larry Ellison, has met or exceeded Wall Street's EPS projections for the past two years, though its closely watched new software sales fell short of analysts' forecasts in the quarter ending last August as it got hit by the brunt of the tech slowdown.

"We're hearing that pipelines at Oracle are building," said J.P. Morgan analyst John DiFucci. He is one of several analysts who said that industry contacts have told them Oracle's business was brisk during the quarter.

"This company has executed as well as or better than any technology company over the past couple years. There is no reason to assume they wouldn't continue to do that," he said.

The wild card in Oracle's results will be the performance of high-end computer server maker Sun Microsystems, a $7.5 billion acquisition that closed about five weeks before the end of the quarter.

The Sun deal thrusts Oracle -- which was co-founded by Ellison more than 30 years ago as a maker of a database for the U.S. Central Intelligence Agency -- into the hardware market for the first time. It pits Oracle into direct competition with IBM (IBM.N), Hewlett-Packard Co (HPQ.N) and Dell Inc (DELL.O).

Ellison, the brash, 65-year-old Silicon Valley icon who last month claimed a long coveted America's Cup sailing trophy, has promised to quickly turn around Sun, which lost more than $2 billion in the two years prior to its sale.

Analysts said they expect investors to write off Sun's results for the February quarter, though they will hold Ellison accountable for meeting the targets he has issued for Sun going forward.

SHARES NEAR 9-YEAR HIGH

Shares of Oracle, which competes against SAP (SAPG.DE) in the business management software market, hit a nine-year high last week, in part on optimism over the recovery in corporate technology spending.

Gartner is forecasting a 4.6 percent rise in tech spending this year, after it dropped 4.6 percent in 2009. Investors will closely watch Oracle's results to gauge whether Gartner's forecast is holding up.

"Oracle is a great indicator of what could be seen in this next earnings season," said Kim Caughey, a senior analyst with Fort Pitt Capital Group, which holds shares in Oracle. "The economy is less bad and I see a little bit of a rebound."

Wall Street expects Oracle to report fiscal third quarter revenue of $6.35 billion, up 15 percent from a year earlier, according to Thomson Reuters I/B/E/S.

Oracle's results this week follow cautiously optimistic comments from rivals about the coming year. In January, IBM raised its 2010 profit target [ID:nN19218960], while SAP forecast a slow recovery this year and a return to double-digit growth in 2011 [ID:nLDE60Q044].

Pacific Crest Securities analyst Brendan Barnicle said he expects Oracle will start to see more benefits from Sun in the current fourth quarter, traditionally its strongest period as sales staff push hard to book sales to boost year-end bonuses.

Ellison has said that Sun will post $1.5 billion in operating profit, add at least 15 cents per share to earnings and ring up $9.6 billion in revenue in the fiscal year that ends in May 2011.

Although Oracle is likely to issue detailed fourth-quarter earnings projections that break out Sun's results, Ellison will probably refrain from making any prognostications on the economy, unlike John Chambers of Cisco Systems Inc (CSCO.O). Ellison and Oracle executives generally say they do not have access to any more information than analysts and investors.

Oracle shares rose 44 cents to $25.64 on Monday. They traded at $25.73 on March 19, their highest level since February 2001 when the dot.com rally was crashing.

(Reporting by Jim Finkle; Editing by Tiffany Wu, Phil Berlowitz)