Oracle Profits Surge 15 PercentBy Lisa Vaas | Print
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The world's second-biggest software maker posts quarterly profit results that point to an industry recovery
Oracle Corp. on Monday reported a 15 percent surge in second-quarter profits, a gain it attributed in large part to something not seen in the industry for some time: namely, businesses spending money on software.
Oracle, of Redwood Shores, Calif., on Monday pegged net income for the quarter at $617 million. The company earned $0.12 per share during the second quarter, up from $0.10 last year. Software sales were up 13 percent, bringing in some $849 million, while revenues from licensing updates and product support were up 17 percent to $1,114 million.
CFO Jeff Henley said in a statement that the upbeat results point to an economic recovery. "We are extremely pleased with the strong performance we saw this quarter," Henley said. "Solid execution in the field, a strengthening competitive position, and an improving economy contributed to results that were above expectations. The growth was also balanced. All major software product categories and geographic regions posted growth."
Oracle didn't miss the opportunity to get a dig in to PeopleSoft, which Oracle has been aggressively courting for months. "Our applications growth of 27 percent exceeded the growth rates of many of our competitors, including SAP, PeopleSoft, Lawson, and Siebel, in their most recently reported quarters," said CEO Larry Ellison in a statement. "For example, new license sales at the combined PeopleSoft and JD Edwards company declined 18 percent as compared to their results when they were operating as separate companies," he said. "But the very fastest growing part of our applications business is outsourcing, which increased 82 percent in the quarter."
Ellison went on to pump up the volume on Oracle 10g, the company's forthcoming grid-computing platform. "Our database technology business depends on our ability to innovate," he said in the statement. "In the next few weeks we will complete delivery of Oracle 10g, the first databse and application server designed to run on a grid of low-cost computers. Grid technology improves performance and reliability while dramatically lowering the cost of computing infrastructure. That's the kind of innovation that customers find compelling.