Oracle Edges Forecasts, Helped by Acquisitions

Oracle, the world's third-largest software maker, reported a 25% rise in quarterly profit on Thursday, boosted by higher-than-expected sales of new software.

The company's revenue and earnings per share excluding items beat average Wall Street expectations. Shares rose more than 4% in heavy trading on Friday.

Oracle's headquarters in Redwood City, California.
Paul Sakuma
Oracle's headquarters in Redwood City, California.

"We continue to take applications market share from SAP," Oracle President Charles Phillips said in a statement.

Oracle is the leader in database software, ahead of IBM, and is No. 2 in business applications, behind Germany's SAP.

Net income jumped to $840 million, or 16 cents per share, for the first quarter ended August 31, from $670 million, or 13 cents, a year earlier.

Revenue rose 26% to $4.53 billion, beating the average analyst target of $4.36 billion, according to analysts' estimates.

Earnings, excluding items such as stock-based compensation expenses and acquisition-related charges, were 22 cents per share, a penny above the average Wall Street expectation, according to Reuters Estimates.

The results were buoyed by sales of products that were not in their lineup a year ago. Oracle added them after buying Hyperion Solutions, Stellent, MetaSolv and several other software makers over the past year.

Revenue from new software licenses rose 35% from a year earlier to $1.1 billion. Three months ago, it had told investors it expected new software licenses to rise between 20% and 30% from the year-earlier period.

Shares of Oracle trade at about 16 times the average outlook for next year's earnings per share, and slightly above the future price-to-earnings ratio for Microsoft, which is 16.