Oracle hits forecasts, court date is set

12-03-2004

by Craig Liddell

United States software giant, Oracle, has released quarterly results in line with analysts' expectations as the company prepares to head to the courts in June.

Third quarter revenues were up 9 percent to USD2.5 billion (EUR2.04 billion) while net income in the three months to 29 February grew 11 percent to USD635 million. Earnings per share were USD0.12 compared with USD0.11 last year. The figures are in line with analyst's expectations of USD0.12 based on revenue of USD2.51 billion.

"Oracle's fiscal third quarter was another solid quarter, with new software license revenue growth of 12 percent, which is identical to last quarter," said Oracle chairman and chief financial officer (CFO) Jeff Henley. "It shows a continued increase in operating margin which demonstrates the leverage in the Oracle business model."

The results come in the same week that the US courts set a trial date for hearings in a fight between Oracle and the US Department of Justice (DOJ). US District Court Judge Vaughn Walker set a date of 7 June following a preliminary hearing in San Francisco on Wednesday.

In February, the DOJ launched a lawsuit to block Oracle's USD9.4 billion (EUR7.67) hostile takeover of rival PeopleSoft, claiming the deal is anti-competitive. Oracle is keen expand its non-database business but PeopleSoft has already rejected the offer twice in the past year.

Meanwhile, Oracle's new software licence sales were up 12 percent to USD847 million, while software licence updates and product support revenues were up 17 percent to USD1,176 million. Third quarter operating margin was 37 percent compared to 35 percent last year. Operating cash flow in the first nine months of the fiscal year was USD2.2 billion (EUR1.80).

Releasing the results, CEO Larry Ellison noted the very strong quarter for the company's database business. "Overall, our database growth was 16 percent. Sales of the RAC option for our database increased 86 percent," Ellison said. "This is very important because RAC is what customers buy when they're building database grids. Rapid RAC growth indicates rapid acceptance of Oracle10g's high-performance, high-reliability grid capabilities. Oracle 10g has now broken almost all database performance world records."

Oracle has substantial operations in Ireland, employing just over 1,000 people in sales, consultancy and software support units.