Oracle: Sun Integration Going “Better Than Expected”

Evidently, Oracle’s integration of Sun is coming along well. Reporting third-quarter earnings that were in line with Street estimates after market close Thursday, the company offered an enthusiastic update on its ingestion of the former Silicon Valley icon.

“The Sun integration is going even better than we expected,” said Oracle President Safra Catz. “We believe that Sun will make a significant contribution to our fourth quarter earnings per share as well as meet the profitability goals we set for next year.”

Oracle (ORCL) said its net income for the quarter fell to $1.2 billion, or 23 cents a share, from $1.3 billion, or 26 cents a share last year. But revenue rose to $6.4 billion from $5.5 billion. Excluding items, earnings for the quarter were 38 cents a share, which is what analysts surveyed by Thomson Reuters had been expecting.

Two last details worth noting: Revenue from new software licenses rose 13 percent during the quarter. Another sign that enterprise spending on technology is on the rise.

Oracle CEO Larry Ellison is a funny guy. From the company’s earnings release:

“Every quarter we grab huge chunks of market share from SAP,” said Oracle CEO, Larry Ellison. “SAP’s most recent quarter was the best quarter of their year, only down 15%, while Oracle’s application sales were up 21%. But SAP is well ahead of us in the number of CEOs for this year, announcing their third and fourth, while we only had one.”

Oracle Reports GAAP EPS of $0.23, Non-GAAP EPS of $0.38

REDWOOD SHORES, Calif., March 25, 2010 — Oracle Corporation (NASDAQ: ORCL) today announced fiscal 2010 Q3 GAAP total revenues were up 17% to $6.4 billion, while non- GAAP total revenues were up 18% to $6.5 billion. Excluding the impact of Sun Microsystems, Inc., which Oracle acquired on January 26, 2010, GAAP total revenue grew 7%. GAAP new software license revenues were up 13% to $1.7 billion, and up 10% to $1.7 billion excluding Sun. GAAP software license updates and product support revenues were up 13% to $3.3 billion, while non-GAAP software license updates and product support revenues were up 12% to $3.3 billion. GAAP operating income was down 5% to $1.8 billion, and GAAP operating margin was 29%. Non-GAAP operating income was up 13% to $2.9 billion, and non-GAAP operating margin was 45%. GAAP net income was down 10% to $1.2 billion, while non-GAAP net income was up 9% to $1.9 billion. GAAP earnings per share were $0.23, down 11% compared to last year while non-GAAP earnings per share were up 9% to $0.38. GAAP operating cash flow on a trailing twelve-month basis was $8.2 billion.

“Our solid top line growth, coupled with disciplined expense management, was key in generating $8.0 billion of free cash flow over the last twelve months,” said Oracle CFO Jeff Epstein.

“The Sun integration is going even better than we expected,” said Oracle President, Safra Catz. “We believe that Sun will make a significant contribution to our fourth quarter earnings per share as well as meet the profitability goals we set for next year.”

“Exadata is the fastest growing product in Oracle’s history,” said Oracle President, Charles Phillips. “Introduced a little over a year ago, the Exadata pipeline is now approaching $400 million with Q4 bookings forecast at nearly $100 million. This strengthens both sales growth and profitability in our Sun server and storage businesses.”

“Every quarter we grab huge chunks of market share from SAP,” said Oracle CEO, Larry Ellison. “SAP’s most recent quarter was the best quarter of their year, only down 15%, while Oracle’s application sales were up 21%. But SAP is well ahead of us in the number of CEOs for this year, announcing their third and fourth, while we only had one.”
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 April 14, 2010, with a payment date of May 5, 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.