Its shares rose 3% after it said new software program sales, a gauge of future profit because they produce high-margin long-term service contracts, increased 17% in its very first fiscal quarter, ended August 31. Analysts had expected 15%.
Oracle also forecast software sales growth for the current quarter in a variety of 6% to 16%, which was much higher than the actual flat to 10% estimated by ThinkEquity analyst Brian Schwartz.
Executives also said they're confident of market share gains against rivals such because SAP in Europe, a region that along with West Asia and Africa makes up about a third of its business but is grappling having a widening economic crisis.
"I'm certainly encouraged by that permit revenue growth. In the near term that's a really positive indicator, " Schwartz said, even as he noted how the company's overall revenue forecast was lighter than expected.
Oracle predict a 4% to 8% gain in revenue this one fourth, translating into sales of $9 billion to $9. 3 million, slightly lagging forecasts of $9. 36 billion.
It also forecast earnings before one-time components of 56 cents to 58 cents per share for the present quarter, compared with the 56 cents expected by Walls Street.
The outlook for worldwide technology spending darkened following warnings by major technology vendors from Dell Inc in order to Cisco Systems Inc. Governments are scaling back purchases to reduce deficits while corporations are tightening budgets to handle an uncertain economic picture.
Oracle, which competes with SAP within selling software to corporations and public agencies, reports results per month before its rivals -- giving investors a first peek at July and August this season -- and is watched for the latest insights in to industry trends.
European strength foreshadowed?
A stronger-than-expected European performance -- partly credited by executives to promote share gains against arch foe SAP -- helped increase sales last quarter.
However, Richard Davis, an analyst from Canaccord Genuity, noted that the European countries in the majority of trouble -- Greece, Ireland and Spain -- were not really key markets anyway. "They're doing well in the markets where they must be doing well, " he said.
The company, which is actually run by flamboyant Silicon Valley billionaire Larry Ellison, upon Tuesday reported revenue of $8. 37 billion for the actual fiscal first quarter. This is just a touch in front of Wall Street's estimate of $8. 35 billion and upward 11. 6% from $7. 50 billion in the year-ago time period.
"We just had a solid quarter in Europe, inch said President Mark Hurd. "I would be cautious that it isn't really macro but maybe more Oracle-specific. We're hiring in European countries. "
As well as software, Oracle sells server computers following its purchase of Sun Microsystems this past year. Overall hardware sales -- a weak spot in Oracle's or else robust numbers -- slipped 1% to $1. 67 million, lighter than expected as the company sacrificed sales with regard to profitability.
The company said it expects another weak quarter for hardware and forecast sales in a variety of flat to down 5% in the current quarter.
"The perspective seemed fine, " said Canaccord's Davis. "They've done this particular three quarters now -- slightly lower revenue growth as well as better margin growth. They're doing the right thing. We'll see how it plays out but for now they're who is fit. "
Margins climbed to 54% from 48% in the prior quarter, reflecting a strategy of moving toward higher-end machines and relinquishing volume sales growth.
Net income rose in order to $1. 84 billion, or 36 cents share, from $1. thirty-five billion, or 27 cents a share, in the same quarter the entire year before.
The company also announced a quarterly cash dividend of 6 cents per share to become paid on November 2.
Shares of the world's third-largest software program maker rose 3% to $29. 25 in extended buying and selling, after closing down 2. 3% at $28. 35 about the Nasdaq.
Source : Business-Standard