Oracle 2Q earnings rise 18 pct to top Street view

Dec 18, 2012 by Michael Liedtke

Oracle's latest quarterly earnings rose 18 percent as companies splurged on more software and other technology toward the end of the year.

The results announced Tuesday are an improvement from Oracle's previous quarter, when the business 's revenue dipped slightly from a year earlier.

The latest quarter spanned September through November. That makes Oracle the first technology bellwether to provide insights into corporate spending since the Nov. 6 re-election of President and negotiations to avoid the so-called fiscal cliff began to heat up in Washington.

. said it earned $2.6 billion, or 53 cents per share, in its fiscal second quarter. That compares with net income of $2.2 billion, or 43 cents per share, a year ago.

If not for charges for past acquisitions and certain other costs, Oracle said it would have earned 64 cents per share. On that basis, Oracle topped the average earnings estimate of 61 cents per share among analysts surveyed by FactSet.

Revenue increased 3 percent from last year to $9.1 billion—about $900 million more than analysts had projected.

In a particularly heartening sign, Oracle said sales of new and subscriptions to its online services climbed 17 percent from last year to outstrip the most optimistic predictions issued by management three months ago.

The flow of new licenses and subscriptions, which represent about a quarter of Oracle's revenue, is closely tracked by investors because they spawn more revenue in the future from upgrades.

Oracle's added 31 cents to $33.19 in extended trading after the numbers came out.

The solid performance by the Redwood Shores, California, company suggest corporate decision makers aren't yet fretting too much about the economy falling off a fiscal cliff and plunging into a . The fiscal cliff refers to the combination of wide-ranging increases in taxes and wrenching cuts in that will be automatically triggered Jan. 1 unless the Obama administration and Congress can reach an agreement on how to soften the impact.

The specter of higher taxes prompted Oracle to make the unusual decision to bunch the next three quarters of stock dividends into a single payment that will be made before the end of the year. The move, announced earlier this month, is designed to ensure that Oracle CEO Larry Ellison, who owns a 23.5 percent stake in the company, and his fellow shareholders don't get hit with a higher tax bill on dividend income next year.

Oracle would have fared even better if it could find a way to sell more computer servers and other hardware, something it has been unsuccessfully trying to do since completing its $7.3 billion acquisition of Sun Microsystems Inc. in 2010. The company's hardware revenue plunged 16 percent from last year.

Explore further: Airbnb rental site raises $450 mn

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Oracle's profit tops Street, but worries surface

Jun 23, 2011

(AP) -- Oracle Corp.'s latest quarterly results Thursday underscore the critical role its software business plays despite its push to become a more well-rounded technology vendor by selling computer servers.

Oracle fiscal 3Q net income up 78 pct

Mar 24, 2011

(AP) -- Database software maker Oracle Corp. said Thursday its net income rose 78 percent in the fiscal third quarter, helped by a rise in new software license sales and the benefit of three full months of ...

Oracle's net rises 36 percent, but servers slip

Sep 20, 2011

(AP) -- Stronger spending on business software helped Oracle Corp.'s quarterly profit jump 36 percent, but the company's server business further deteriorated, a decline Oracle attributed to its move to shed ...

Oracle's 3Q earnings top analyst forecasts

Mar 20, 2012

Sales of new software licenses at Oracle accelerated in the latest quarter, easing concerns about customers defecting to less expensive alternatives on the Internet.

Recommended for you

Airbnb rental site raises $450 mn

8 hours ago

Online lodging listings website Airbnb inked a $450 million funding deal with investors led by TPG, a source close to the matter said Friday.

US venture investments highest since 2001 (Update)

Apr 18, 2014

Funding for U.S. startup companies soared 57 percent in the first quarter to a level not seen since 2001, as venture capitalists piled more money into a growing number of deals, according to a report due out Friday.

User comments : 0

More news stories

Airbnb rental site raises $450 mn

Online lodging listings website Airbnb inked a $450 million funding deal with investors led by TPG, a source close to the matter said Friday.

Health care site flagged in Heartbleed review

People with accounts on the enrollment website for President Barack Obama's signature health care law are being told to change their passwords following an administration-wide review of the government's vulnerability to the ...