DOW JONES NEWSWIRES
Oracle Corp.'s (ORCL) fiscal second-quarter earnings rose 28% as
the business-software giant continued to see strength in both its
traditional software side and its new hardware business.
Shares were up 4% at $31.47 after hours as the results beat the
company's guidance. Through the close, Oracle shares have climbed
23% so far in 2010, outpacing the wider market.
The company, which also sells database systems and now server
hardware through its $7.4 billion acquisition of Sun Microsystems
in January, bolstered earnings in the most recent period through
strong revenue growth and "disciplined business management,"
according to President Safra Catz on Thursday.
The latest results continue a pattern of broad-based
strengthening in its software business combined with accelerating
performance in the new hardware operations. Last month, Oracle
agreed to pay nearly $1 billion for Art Technology Group Inc.
(ARTG), which would expand the company into e-commerce
software.
For the quarter ended Nov. 30, the company posted a profit of
$1.87 billion, or 37 cents a share, from $1.46 billion, or 29 cents
a share, a year earlier. Excluding stock-compensation,
restructuring and acquisition-related costs, earnings rose to 51
cents a share from 39 cents.
Revenue increased 47% to $8.58 billion, while, in
constant-currency terms, it rose 48%. Roughly half the company's
revenue originates in markets outside the U.S.
In September, Oracle predicted earnings of 44 cents to 46 cents
a share and revenue growth of 42% to 47% in constant currency.
Operating margin narrowed to 32% from 37% as the lower-margin
hardware business dragged down the percentage, although the margin
in the hardware business itself improved.
New license revenue, a key measure of software growth, rose 21%.
The hardware business contributed $1.75 billion to the top line,
representing about 20% of total revenue. Total software revenue
grew 15%, and the much-smaller services segment had a 23% jump.
The company won a record $1.3 billion copyright-infringement
verdict against rival SAP AG (SAP, SAP.XE) in November. A month
prior, Oracle updated its copyright and patent-infringement lawsuit
against Google Inc. (GOOG), claiming some of the Internet search
giant's Android mobile-phone software was "directly copied" from
the business software maker's Java code.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291;
joan.solsman@dowjones.com