Oracle’s Earnings, Revenue Increase
Business software maker Oracle Corp. said Thursday that fiscal fourth-quarter profit rose 27% as sales surged across most of its business lines and geographic regions.
Net income for the three months ended May 31 rose to $1.3 billion, or 24 cents a share, compared with $1.02 billion, or 20 cents, in the same quarter last year. Revenue grew 25% to a record $4.85 billion from $3.88 billion. The results were largely in line with estimates issued last week, when the Redwood Shores, Calif.-based company said it expected to beat an earlier financial forecast.
Excluding acquisition expenses and other costs, Oracle earned 29 cents a share, 1 cent higher than the average estimate among analysts polled by Thomson Financial. Sales also beat Wall Street estimates of $4.7 billion. If it weren’t for a higher-than-expected tax rate, Oracle would have earned 30 cents, President Safra Catz said.
New software license sales, which investors watch closely because they are a strong indicator of future performance, rose 32% to $2.1 billion from $1.6 billion last year. Results for both periods include Oracle’s $11.1-billion acquisition of PeopleSoft Inc.
Since early last year, Oracle has spent more than $20 billion acquiring competitors in the business software arena in a bid to combat slowing growth.
“It was a very, very strong finish to a very critical year for Oracle,” Catz said during a conference call with reporters. “It shows that our strategy is working and taking hold.”
Catz forecast that profit in the current quarter before one-time costs would be 16 cents, matching the average analyst estimate. Sales will rise 19% to 20% from the same period last year, she said, which translates to $3.29 billion to $3.32 billion, below the $3.36 billion that analysts had been expecting.
Catz said the forecast was highly dependent on currency exchange rates, which have fluctuated recently.
In the company’s fourth quarter, sales of database and related software grew 18%.
Kim Caughey, an analyst who helps manage more than $900 million in assets at Fort Pitt Capital Group, said Oracle’s results could indicate the beginning of a new business software buying cycle and be a sign that the company was seeing the benefit of recent acquisitions.
Oracle released the results after the stock market closed. The company’s shares rose 8 cents in after-hours trading. Earlier, they fell 20 cents to $14.33.
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The Associated Press and Reuters were used in compiling this report.
