Oracle posts strong Q4, full-year results

Showing strong growth amid a worldwide economic downturn, Oracle on Wednesday reported fourth-quarter revenues of $7.2bn (£3.64bn).


Showing strong growth amid a worldwide economic downturn, Oracle on Wednesday reported fourth-quarter revenues of $7.2bn (£3.64bn).

This is a 24 percent rise compared to the same quarter last year, and total revenue for fiscal 2008 of $22.4bn (£11.33bn).

Fourth-quarter earnings per share were up 27 percent to 39 cents over the same quarter in 2007, and net income also rose 27 percent, to $2 billion. For the fiscal year, earnings per share stood at $1.06, a rise of 30 percent. Net income for the year was $5.5 billion (£2.78 billion), up 29 percent.

Excluding one-time charges, analysts polled by Thomson Financial had on average predicted earnings per share of 44 cents for the fourth quarter and $1.27 for the year.

Oracle's adjusted results beat those estimates, at 47 cents per share for the quarter and $1.30 for the fiscal year.

Fourth-quarter software revenues rose 26 percent to $6.0 billion.

On a geographic basis, Oracle showed stronger growth in the Europe, Middle East and Africa region, with fourth-quarter revenue of $2.68 billion, compared with $1.99 billion last year. Meanwhile, sales for the quarter in Asia-Pacific were $986 million, compared to $818 million in 2007. Fourth-quarter revenue in the Americas was $3.57 billion, up from $3 billion last year.

Middleware maker BEA, which Oracle recently acquired, contributed $93 million in new licence revenue in the quarter, "exceeding our expectations," Chief Financial Officer Safra Catz said during a conference call on Wednesday.

However, Oracle expects BEA's new licence revenue in the next quarter to be only $50 million to $60 million, she said.

Due to traditional seasonal slowdowns, adjusted earnings in the first quarter will drop as well, to 26 cents or 27 cents per share, according to Catz. That forecast was in line with analysts' consensus estimate of 27 cents.

But CEO Larry Ellison was characteristically bullish in regard to Oracle's future.

"We're going to remain number one in database and increase overall market share. We're doing that because we have better products than the competition," Ellison said.

Without giving specifics, Ellison said Oracle will announce "a major database innovation" in September.

But Ellison wasn't as bold when discussing certain initiatives and product lines at Oracle.

Asked about the progress of Oracle's long-simmering Fusion Applications, which are set to replace its various product lines over an extended timeframe, Ellison referred to the initial handful of Fusion products focused on CRM (customer relationship management) that have been announced, but he didn't set a detailed timetable for future releases.

Also, Oracle's on-demand business showed strong full-year growth, from $557 million to $694 million, but has remained a fairly small percentage of its overall revenue.

Ellison said the company has been biding its time, working out the kinks in the on-demand model. Rival SAP recently reined in rollout plans for its own on-demand ERP (enterprise resource planning) offering for the midmarket, saying it needed to ensure the product would be profitable enough.

"We've been in the on-demand business almost for a decade. Q4 was the first quarter we actually made money in the on-demand business," Ellison said. "The entire industry has to get better at making money selling on-demand. If you look at Salesforce, they don't make a lot of money. That's what we're focused on before we scale the business." (Salesforce posted net income of $9.55 million on $247.6 million in revenue for the quarter ended April 30.)

Overall, though, Wall Street is increasingly viewing Oracle as a bellwether for the tech space overall, and even the larger economy.

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