For its second fiscal quarter, Oracle turned in a financial report that beat Wall Street's estimates. The company credited strong sales of software and cloud computing products for the results, and CEO Larry Ellison announced that the Sun Microsystem hardware business is now profitable.
Bloomberg BusinessWeek's Aaron Ricadela reported, "Oracle Corp. (ORC) reported fiscal second- quarter sales and profit that topped analysts’ estimates on growing demand for Internet-based software, which is now on track to bring in more than $1 billion in revenue this year. Profit excluding some items was 64 cents a share on adjusted revenue of $9.11 billion, the Redwood City, California- based company said yesterday in a statement. That compares with analysts’ average projection for profit of 61 cents on sales of $9.02 billion, according to data (ORCL) compiled by Bloomberg. Adjusted revenue includes some subscription and support contracts, as well as other licensing revenue."
The Associated Press noted, "In a particularly heartening sign, Oracle said sales of new software licenses and subscriptions to its online services climbed 17 percent from last year to outstrip the most optimistic predictions issued by management three months ago." It added, "In the current quarter, which ends in February, Oracle expects software licenses and subscriptions to increase in the range of 3 percent to 13 percent from the previous year. The company, based in Redwood Shores, Calif., predicted its adjusted earnings in the current quarter will range from 64 cents to 68 cents a share on revenue ranging from $9.1 billion to $9.5 billion. That would be a 1 percent to 5 percent increase from the prior year."
All Things D quoted Oracle CEO Larry Ellison, who said, "Sun has proven to be one of the most strategic and profitable acquisitions we have ever made. Sun technology enabled Oracle to become a leader in the highly profitable engineered system segment of the hardware business. I believe that products like Exadata and the SPARC SuperCluster will not only continue to drive improved profitability in our hardware business, by the end of this fiscal year, they will also drive growth in our hardware business."
Reuters observed, "Shares of Oracle Corp, the world's No. 3 software maker, rose 4 percent to their highest in 19 months on Wednesday after it forecast strong sales for next year, prompting several brokerages to raise their price targets on the stock. The company's results often set the tone for smaller software makers, and analysts said the 17 percent jump in its quarterly software sales boded well for the industry."