Oracle Earnings, Revenue Beat Forecasts; Shares Jump
Oraclereported a profit that jumped 38 percent excluding one-time items and easily outpaced analysts' estimates, helped by strong sales of new business software and faster-than-expected growth of its new hardware business.
The maker of database software and other business technology said it earned 42 cents a share on a non-GAAP in its fiscal first quarter, compared with 30 cents a share during the same period last year.
Revenue for the most recent quarter to $7.59 billion, against $5.06 billion a year ago.
Analyst who follow Oracle expected the company to report a profit of 37 cents a share on a topline of $7.27 billion.
"We executed better than expected on both the top and bottom line for the quarter," said Oracle CFO Jeff Epstein in a prepared statement.
Including one-time items, earnings per share rose 20 percent over last year, to 27 cents.
New software sales—which generate long-term maintenance contracts, signaling future profitability—were up 25 percent to $1.3 billion. The company had forecast three months ago they would rise between 2 percent and 12 percent.
"It looks like they had a good first quarter. Strong revenue this year in maintenance means strong revenue in the future for maintenance—you're paying to get an upgrade in the future. It's a zero-cost line item," said Kim Caughey, senior analyst at Fort Pitt Capital Group. "The overperformance on revenue isn't due to currency—always reassuring."
Shares of the world's No. 3 software maker, which sells business software, database systems and now server hardware through its recent purchase of Sun Microsystems, popped more than 4 percent higher in extended trading Thursday. Get After-Hour Quotes for Oracle here.
The stock, a component of the Dow Jones Industrial Average, was at $25.36 at the day's closing bell.
Mark Hurd Melodrama
Oracle's results, reported Thursday, came as the company finds itself in a starring role in Silicon Valley's latest soap opera, this one involving Mark Hurd, the ousted chief of Hewlett-Packard. Oracle has scooped Hurd up to help sharpen its attack on its longtime partner HP.