Oracle’s Quarterly Profit Climbs 42%
Oracle Corp.’s fiscal third-quarter profit rose 42%, the business software maker’s biggest gain since it launched a high-priced shopping spree more than a year ago.
The Redwood Shores, Calif.-based company said Monday that it earned $765 million, or 14 cents a share, for the three months ended Feb. 28. That compared with net income of $540 million, or 10 cents a share, at the same time last year.
Revenue totaled $3.47 billion, up 18% from $2.95 billion a year earlier. Had the dollar not strengthened substantially over the last year, Oracle said, its revenue would have climbed about 22%.
After subtracting acquisition costs and other charges unrelated to ongoing operations, Oracle said it earned 19 cents a share. That figure was a penny above the average estimate of analysts surveyed by Thomson Financial.
The company released the results after the stock market closed. Oracle’s shares had climbed 12 cents to close at $13.72. They shed 28 cents in extended trading.
The performance represented Oracle’s highest quarterly profit increase since it devoured longtime rival PeopleSoft Inc. in an $11.1-billion acquisition completed in January 2005.
Since then, Oracle has taken over Siebel Systems Inc., Retek Inc. and several other smaller software makers, raising the total price of its recent buying binge to nearly $20 billion.
Oracle mounted the aggressive expansion to bolster its stock price and pose a stiffer challenge to Germany-based SAP, the longtime leader in business applications software.
The strategy hasn’t paid off yet. Oracle’s stock remains at about the same price as before the company’s shopping spree. SAP, meanwhile, says it is picking up more sales from corporate customers worried about how Oracle’s wave of takeovers might affect the quality of future products.
The latest quarter, though, indicates that Oracle is finally picking up steam as it grows larger. Sales of new software licenses in the quarter totaled $1.1 billion, a 16% increase from last year.
New licenses are a bellwether for software makers because they lead to a stream of service and support revenue.
