Oracle Earnings Are Zooming Again

Published on March 20, 2012
by Arik Hesseldahl

Shares in the software giant Oracle are up more than 3 percent in after-hours trading after the company reported earnings that soundly beat the expectations of analysts.

Oracle reported a 62 cents per share profit, soundly beating the 56 cents that analysts had expected. Sales, at $9.1 billion, were ahead of expectations by $100 million.

President and CFO Safra Catz said the company is on track to deliver what she said will be the highest operating profit margins in the company’s history this year. Software license sales were up 7 percent, while product support revenue was up 8 percent.

The bad news came, as usual, in hardware, where overall sales were down 16 percent, though sales of its engineered systems grew by nearly 140 percent.

It’s a better report than last quarter, when the company missed a few key sales targets. The shares suffered the next day as a result and haven’t recovered since.

The press release is below. I’ll have more later as the conference call with analysts gets underway.


Trailing Twelve Month Operating Cash Flow Up 35% to $13.5 billion

REDWOOD SHORES, Calif., Mar. 20, 2012 — Oracle Corporation (NASDAQ: ORCL) today announced fiscal 2012 Q3 GAAP total revenues were up 3% to $9.0 billion, and non-GAAP total revenues were up 3% to $9.1 billion. Both GAAP and non-GAAP new software license revenues were up 7% to $2.4 billion. Both GAAP and non-GAAP software license updates and product support revenues were up 8% to $4.1 billion. Both GAAP and non-GAAP hardware systems products revenues were down 16% to $869 million. GAAP operating income was up 11% to $3.3 billion, and GAAP operating margin was 37%. Non-GAAP operating income was up 8% to $4.2 billion, and non-GAAP operating margin was 46%. GAAP net income was up 18% to $2.5 billion, while non-GAAP net income was up 13% to $3.1 billion. GAAP earnings per share were $0.49, up 20% compared to last year while non-GAAP earnings per share were up 15% to $0.62. GAAP operating cash flow on a trailing twelve-month basis was $13.5 billion.

“Oracle is on track to deliver the highest operating margins in our history this year,” said Oracle President and CFO, Safra Catz. “Oracle can achieve these record margins as an integrated hardware and software company because we are focusing on high margin systems where hardware and software are engineered to work together.”

“Hardware revenue for our engineered systems grew 139% this quarter and going into Q4, we have a record pipeline,” said Oracle President, Mark Hurd. “In applications, Fusion in the Cloud is winning with great success against niche HCM cloud vendors in the US and worldwide. Our modular, integrated platform of 100 apps available in the cloud or on-premise is a key differentiator.”

“This past quarter Oracle delivered the hardware and software for our new extreme performance Exalytics In-Memory Machine,” said Oracle CEO, Larry Ellison. “At the core of Exalytics is our new in-memory database technology capable of instantaneous big data analysis; questions are answered at the speed of thought. And unlike SAP’s Hana in memory appliance, Exalytics runs your existing applications. Simply plug-in Exalytics and your existing Oracle Business Intelligence applications and Hyperion Enterprise Performance Management applications run much, much faster.”

The Board of Directors also declared a quarterly cash dividend of $0.06 per share of outstanding common stock. This dividend will be paid to stockholders of record as of the close of business on April 11, 2012, with a payment date of May 2, 2012.

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