Oracle profit, sales top expectations
Business software maker Oracle Corp. overcame the recent economic turbulence that raised recession anxieties to deliver a fiscal first-quarter performance that exceeded analyst expectations.
The Redwood Shores, Calif.-based company said Thursday that it earned $840 million, or 16 cents a share, for the three months ended in August. That represented about a 25% improvement from net income of $670 million, or 13 cents, at the same time last year.
If not for stock option expenses, Oracle said it would have made 22 cents a share -- a penny above the average estimate among analysts polled by Thomson Financial.
Revenue for the period totaled $4.53 billion, 26% above last year’s $3.59 billion and well above the average analyst estimate of $4.34 billion.
Perhaps most important to investors, Oracle’s sales of new software licenses climbed 35% to $1.09 billion, soaring past both management and analyst projections. It represented Oracle’s most robust software sales growth during its fiscal first quarter in a decade, said Safra Catz, the company’s chief financial officer.
Wall Street focuses on software sales because the new licenses establish a pipeline for future revenue from product upgrades and maintenance.
Oracle shares reached a 52-week high of $21.31 on Thursday before settling back to finish the regular session at $21.04. The stock added a penny in extended trading after the company released its first-quarter report.
The quarter is usually Oracle’s weakest sales period because so many key decision makers take summer vacations.
August looked as if it might be even more challenging this year as a worsening credit crunch triggered by the slumping real estate market roiled the stock market and raised concerns about both consumers and businesses curtailing their spending.
But the worries apparently didn’t stop companies, schools and government agencies from buying Oracle’s software.
The first-quarter performance extended a prosperous stretch that has justified a costly expansion launched in 2004.
Hoping to build on the company’s dominance in database software, Oracle has spent about $25 billion on more than 30 acquisitions in the last three years.
