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Oracle Beats, and Beats Big

If you think about the Oracle earnings release, it might be even more impressive than it seems. Consider that it has been more than a year since its last acquisition of any real significance, and yet the company was able easily to beat top line forecasts.

Think about that: Oracle, as a key bellwether, seems to be indicating that the enterprise is beginning to spend once again.

The database software giant reported $5.86 billion dollars in revenue versus the $5.69 billion consensus. Oracle also beat on the bottom line, reporting 39 cents a share against the 36 cents that Wall Street anticipated. The biggest and best metric by which to measure Oracle is its New Software License Revenue and this is where the company truly performed: Oracle reporting $1.7 billion there when Wall Street expected something closer to $1.54 billion. In fact, Oracle and the Street both anticipated between zero growth and a 10 percent year-over-year decline in that category. Instead, Oracle reported a surprisingly strong 2 percent gain.

Other key categories: $3.2 billion in software updates and support which was essentially in line with expectations. Services came up a little lighter than expected, $958 million versus the $1 billion expected. And talk about operational execution: Oracle's non-GAAP operating margins of 49 percent is particularly impressive when compared to the 47.8 percent that the Street was looking for.

As I posted earlier, Oracle does indeed expect the EU will approve its deal for Sun Microsystems as soon as next month. A source close to the negotiations tells me "It's a done deal."

You couple this news with optimistic projections from the likes of Cisco Systems , Microsoft , and even Intel and you start to see the puzzle pieces come together in what appears to be a nice recovery on the way for enterprise spenders. This news is certainly a surprise, and for Oracle investors, it's certainly the good kind.

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