Oracle has reported a big jump in revenue for its fiscal fourth quarter, driven by its merger with PeopleSoft and strong sales from all product categories. Revenue for the period, which ended May 31, came in at US$3.88 billion, up 26 percent from a year ago. Sales of new applications licenses were especially strong, growing 52 percent to $350 million, the company said.
Net income for the quarter was $1.02 billion, up 3 percent from a year earlier. Earnings grew 4 percent to $0.20 per share, Oracle said.
The figures are according to generally accepted accounting principles, or GAAP. Oracle's non-GAAP earnings, which exclude one-time charges and other items, grew 36 percent to $0.26 per share, the company said. That beat the consensus analysis estimate of $0.23 per share, according to Thomson First Call.
"The very strong quarter across our entire business -- database, applications and middleware -- capped a great year for Oracle," said Safra Catz, Oracle co-president and interim chief financial officer, in a conference call to discuss the results.
She raised Oracle's earnings forecast for the current fiscal year, to between $0.78 and $0.81 per share. The mean analyst estimate is for $0.78 per share.
Total software revenue increased by 24 percent from a year ago, to $3.1 billion. Of that, new license revenue grew 23 percent to $1.6 billion and license updates and product support revenue grew 26 percent to $1.5 billion. Revenue from services revenue grew 35 percent to $755 million, Oracle said.
New license revenue from database and middleware grew 16 percent. The database business was driven by optional add-ons including RAC, or Real Application Clusters, a technology for stringing smaller database servers together into a larger system. RAC sales grew 27 percent from a year ago, Larry Ellison, Oracle's chief executive officer, said in a conference discussing the results.
"It's the most important feature we have that differentiates us from Microsoft at the low end and IBM at the high end," he said.
Oracle would not break out results from its PeopleSoft acquisition, making it hard to gauge the success of its former applications business. Doing so would be "irrelevant," because the integration of the two groups is now complete, according to Catz. "There are no PeopleSoft salesman or Oracle salesman," she said.
Oracle has said it probably won't make another acquisition on that scale soon, although it has continued to gobble up smaller companies.
"We have no plans to buy anything that doesn't contribute to our long-term strategy and profit growth targets of 20 percent per year over the next five years," Ellison said. "We won't do anything to jeopardize those goals."
Ellison argued that Oracle is growing its database business at the expense of IBM Corp., its main rival. He pointed to recent market share reports from IDC, Gartner Inc. and Morgan Stanley, all of which show Oracle gaining share. "We believe people are moving from mainframes and large-scale systems to Oracle grid," he said.
Still, Gartner's figures show Microsoft Corp., while still in third place, growing its database business fastest of all.
Oracle's Java middleware products will work with other vendors' databases and application servers, Ellison said, but the company is still not saying if the applications it acquired from PeopleSoft will continue to run on other databases.
"The answer is we haven't made that decision yet," Ellison said. "Were talking to customers and seeing what their priorities are and we'll make a decision sometime in the future."
If Oracle decides not to support other databases, former PeopleSoft customers using IBM and Microsoft databases would have to switch to Oracle or change to another vendor's applications.
Oracle has hired Tod Nielsen, a former Microsoft executive who was most recently BEA Systems Inc.'s chief marketing officer until he left that company last year, Ellison said. Nielsen will run the middleware business alongside Thomas Kurian.
It's one of several recent management changes at Oracle. Last week the company said it had hired Greg Maffei, another former Microsoft executive, who will be chief financial officer starting in July. He is also one of three presidents at Oracle, along with Catz and Charles Phillips.
"As the business continues to grow and diversify we have to continue to grow our management team," Ellison said. -- IDG News Service
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