Oracle profits up in first quarter
21-09-2007
by Emmet Ryan

Oracle continued to confound the critics as its net profits soared 25 percent in the software firm's latest set of results.

Oracle's first quarter results, which were released on Thursday, saw the firm record net profits of USD840 million for the period, which equates to earnings per share (EPS) of USD0.16. Revenues for the quarter rose 26 percent to USD4.5 billion while software revenues were up 26 percent to USD3.5 billion.

"We reported new software licence revenues up 35 percent, the strongest growth of any quarter in 10 years," said Oracle chief financial officer Safra Catz. "That software sales growth is translating nicely into EPS growth. We've now completed 13 quarters of our five-year EPS growth plan of 20 percent per year, and we are delivering earnings growth well ahead of that target."

The firm's management was particularly pleased with the inroads the firm was making into its rival SAP's share of the market.

"We continue to take applications market share from SAP," said Oracle president, Charles Phillips. "Oracle's applications new licence sales grew 65 percent [in the quarter] compared to SAP's new licence sales growth rate of 18 percent in their most recently completed quarter."

All in all it's a rather good quarter for a firm that's been the subject of much scepticism from software analysts over its acquisition strategy, which has seen the firm invest USD25 billion over the past three years into bringing together a mixture of software makers. Oracle has snapped up 33 firms since 2005 and the firm's market value has climbed by USD36 billion since the acquisition policy was first implemented in 2004.

Investors showed their approval of the direction the firm has taken as shares hit a 52-week high of USD21.31 on the Nasdaq on Thursday before falling back to finish the regular session at USD21.04. The stock added USD0.10 in extended trading after the company released the results.

The software firm expects its recent good form to continue into the next quarter. Oracle predicts second-quarter earnings to be between USD0.20 and USD0.21 a share, with revenue to grow between 19 and 21 percent.