Oracle Q2 Beats the Street
Earnings on a per-share basis were 64 cents, three cents above the consensus of 61 cents. Sales were $9.11 billion, beating the consensus estimate of $9.03 billion.
Oracle shares finished the day up by more than 1 percent, closing at $32.86. After hours, the shares rose by more than 2 percent to $33.72 by 1:05 pm PT. The shares are up more than 26 percent this year.
The key number is new software license sales, which rose by 17 percent to reach $2.4 billion. License updates grew 7 percent to $4.3 billion. Hardware revenue was $734 million.
In the release, CEO Larry Ellison said that Sun Microsystems, the hardware company Oracle acquired a few years ago, has become profitable. He said that: “Sun has proven to be one of the most strategic and profitable acquisitions we have ever made,” and that Sun’s technology “… enabled Oracle to become a leader in the highly profitable engineered system segment of the hardware business.”
Here’s Oracle’s announcement.
Oracle Reports Q2 GAAP EPS Up 24% to 53 Cents;
Q2 Non-GAAP EPS Up 18% to 64 Cents
New Software Licenses and Cloud Subscriptions Up 17%; Trailing Twelve Month Operating Cash Flow of $13.5 Billion
REDWOOD SHORES, CA–(Marketwire – Dec 18, 2012) – Oracle Corporation ( NASDAQ : ORCL ) today announced that fiscal 2013 Q2 total revenues were up 3% to $9.1 billion. New software licenses and cloud software subscriptions revenues were up 17% to $2.4 billion. Software license updates and product support revenues were up 7% to $4.3 billion. Hardware systems products revenues were $734 million. GAAP operating income was up 12% to $3.5 billion, and GAAP operating margin was 38%. Non-GAAP operating income was up 9% to $4.3 billion, and non-GAAP operating margin was 47%. GAAP net income was up 18% to $2.6 billion, while non-GAAP net income was up 12% to $3.1 billion. GAAP earnings per share were $0.53, up 24% compared to last year while non-GAAP earnings per share were up 18% to $0.64. GAAP operating cash flow on a trailing twelve-month basis was $13.5 billion.
Without the impact of the US dollar strengthening compared to foreign currencies, Oracle’s reported Q2 GAAP earnings per share would have been $0.01 higher at $0.54, up 26%, and Q2 non-GAAP earnings per share would have been $0.01 higher at $0.65, up 19%. Total revenues also would have been up 5%, and new software licenses and cloud software subscriptions revenues would have been up 18%.
“New software license sales and cloud subscriptions grew 18% in constant currency,” said Oracle President and CFO, Safra Catz. “Strong organic growth in our software business coupled with a focus on the highly profitable engineered systems segment of our hardware business enabled a Q2 non-GAAP operating margin of 47%. During the last four quarters operating cash flow was more than $13.5 billion — $10.2 billion of which was returned to our shareholders as we repurchased nearly 350 million ORCL shares during that same twelve month period.”
“Q2 performance was strong and broad based as all geographies reported double-digit revenue growth in new software license and cloud subscriptions,” said Oracle President, Mark Hurd. “Applications, middleware and database all had double-digit growth in new software license and cloud subscriptions, with applications leading the pack with growth of over 30%. Our cloud offering of HCM, CRM and ERP applications plus the Oracle database and Java platform services is the strongest and most complete in the industry. Already approaching a one billion dollar run rate, our Cloud business will become much bigger over time.”
“Sun has proven to be one of the most strategic and profitable acquisitions we have ever made,” said Oracle CEO, Larry Ellison. “Sun technology enabled Oracle to become a leader in the highly profitable engineered system segment of the hardware business. I believe that products like Exadata and the SPARC SuperCluster will not only continue to drive improved profitability in our hardware business, by the end of this fiscal year, they will also drive growth in our hardware business.”
On December 3, 2012, the Board of Directors declared an accelerated second, third and fourth quarter cash dividend totaling $0.18 per share of outstanding common stock. This accelerated dividend is intended by the Board to be in lieu of quarterly dividends Oracle would have otherwise announced with its quarterly earnings results for the second, third and fourth quarters of fiscal year 2013, and that would have been paid in calendar year 2013. This accelerated dividend will be paid to stockholders of record as of the close of business on December 14, 2012, with a payment date of December 21, 2012.