Oracle Tops Estimates, Expects European Union to Clear Sun Deal in January
Oracle shares are gaining in after-hours trading after the company reported second-quarter results that beat expectations. Earnings for the period were 39 cents a share, excluding special items, on revenue of $5.9 billion.
Analysts polled by Thomson Reuters had estimated Oracle (ORCL) would post earnings, excluding special items, of 36 cents a share on $5.7 billion in revenue. “We delivered results which were substantially better than we expected on both the top and bottom line,” Oracle Chief Financial Officer Jeff Epstein said in a statement.
Remarking on the company’s proposed acquisition of Sun (JAVA) in an earnings release, Oracle President Safra Catz said, “We expect the European Commission to unconditionally clear the acquisition of Sun in January. I want to thank all of our customers for the overwhelming support they have given us during this process.”
Shares of Oracle rose more than 4 percent to $23.87 in after-hours trading, following the earnings announcement, before slipping back to $22.88. The company’s stock is up by about a third this year.
Below, Oracle’s earnings release:
Oracle Reports Q2 GAAP EPS of 29 Cents Up 15%, Non-GAAP EPS of 39 Cents Up 15%
Total Revenues Up, New Software License Sales Up, Operating Margin Up, Operating Cash Flow Up
December 17, 2009: 04:00 PM ET
Oracle Corporation (NASDAQ: ORCL) today announced fiscal 2010 Q2 GAAP earnings per share of $0.29, up 15% compared to last year. Second quarter GAAP total revenues were up 4% to $5.9 billion, while quarterly GAAP net income was up 12% to $1.5 billion. GAAP new software license revenues were up 2% to $1.7 billion. GAAP software license updates and product support revenues were up 14% to $3.2 billion. GAAP operating income was up 10% to $2.2 billion and GAAP operating margin was up 200 basis points to 37%. GAAP operating cash flow on a trailing twelve-month basis was $8.7 billion, up 7%.
Second quarter non-GAAP earnings per share were up 15% to $0.39. Non-GAAP total revenues were up 3% to $5.9 billion, while non-GAAP net income was up 12% to $2.0 billion, compared to the same quarter last year. Non-GAAP operating income was up 9% to $2.9 billion and non-GAAP operating margin was up 280 basis points to 49%.
“We delivered results which were substantially better than we expected on both the top and bottom line, growing non-GAAP operating margins by 280 basis points to 49%, the highest Q2 non-GAAP operating margin in our history,” said Oracle CFO Jeff Epstein. “Our solid top line growth, coupled with disciplined expense management, was key in generating $8.4 billion of free cash flow over the last twelve months.”
“We expect the European Commission to unconditionally clear the acquisition of Sun in January,” said Oracle President Safra Catz. “I want to thank all of our customers for the overwhelming support they have given us during this process.”
“For the fourth consecutive quarter, Oracle took market share from SAP in every region around the world,” said Oracle President Charles Phillips. “In constant currency, our applications business grew 1% in the Americas and 2% in Asia Pacific versus a negative 35% and negative 34% respectively for SAP.”
“Sun’s new SPARC Solaris system and Sun’s new Exadata database machine both run the Oracle database faster than IBM’s fastest computer,” said Oracle CEO Larry Ellison. “We expect Sun to rapidly improve both its market share and margins once this merger closes.”
In addition, Oracle’s Board of Directors declared a cash dividend of $0.05 per share of outstanding common stock to be paid to stockholders of record as of the close of business on January 19, 2010, with a payment date of February 9, 2010. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to the final determination of Oracle’s Board of Directors.