Oracle’s Profit Doubles as Sales Leap 14%
Oracle Corp., the world’s No. 2 software maker, said its fiscal first-quarter earnings more than doubled, driven by better-than-expected sales of its flagship database-management programs. The company also said it will split its stock 2 for 1.
Net income climbed 112% to $500.7 million, or 17 cents a share, from $236.7 million, or a split-adjusted 8 cents, a year earlier, topping the 13-cent average estimate of analysts polled by First Call/Thomson Financial.
Sales rose 14% to $2.26 billion. Revenue was buoyed by a 32% jump in sales of databases, software for managing large reams of company information, beating forecasts for 20% growth.
But the total sales growth, and a 42% rise in application software sales, were less than analysts expected for Redwood Shores, Calif.-based Oracle.
“It’s kind of a mixed bag,” said Christian Koch, senior technology analyst at Trusco Capital Management. “Database revenue was above expectations, but applications were below.”
Growth in applications--programs that allow users to manipulate and analyze the information in databases--lagged the 61% rise the company reported in the fourth quarter.
Before the earnings were released, Oracle shares closed up $3.13 at $84.94 on Nasdaq. In after-hours trading, shares dipped as low as $81.94, rose as high as $89.52, then fell back to $83.06.
Oracle Chief Financial Officer Jeff Henley said total revenue will keep rising for the rest of the fiscal year as the company further reduces costs and as sales of applications software continue to rise.
Henley said database sales probably will not rise at the same pace as they did this quarter. Sales are expected to grow at about 20% year-on-year in each quarter for the remainder of fiscal 2001, he said.
“In the database area, it bounces around, but 15% to 25% growth, that seems reasonable,” Henley said in a conference call with analysts.
Oracle’s profit margins widened as the company reduced costs by using its own software to increase efficiency within the company.
The company said it will split its stock Oct. 12 for shareholders of record on Sept. 25.
At a Glance
Other technology-sector earnings, excluding one-time gains or charges unless noted, include:
* Adobe Systems Inc. said profit grew 38% in its fiscal third quarter to $107.1 million, or 57 cents a share, well above analyst expectations of 52 cents. The software company also declared a 2-for-1 stock split, effective Oct. 24. Sales jumped 26% to $328.9 million, better than the 25% growth Adobe had forecast, driven by sales of updated software products for designing Web sites and creating graphics. San Jose-based Adobe released updates of its Illustrator and Go Live products during the quarter.
Adobe released the results after the markets closed. Its shares closed off 56 cents at $125.38 on Nasdaq.
* Red Hat Inc. said its fiscal second-quarter loss widened to $15.7 million, or 10 cents a share, from $4.88 million, or 7 cents, a year ago, as operating expenses tripled. Sales nearly doubled to $18.5 million from $10.5 million.
