Oracle posts 42 percent jump in Q3 profit

21-03-2006

by Ciara O'Brien

Profit at Oracle surged in the third quarter, as demand for new software licences and improved growth in Europe pushed its figures higher.

In the third quarter of the fiscal year 2006, GAAP earnings per share were USD0.14, an increase of 40 percent compared to the same quarter last year.

According to the company, its net income in the third quarter increased almost 42 percent to USD765 million, up from USD540 million, in the same period a year earlier. Revenue also grew, rising from USD2.95 billion to USD3.47 billion.

Total GAAP software revenues rose 20 percent in the quarter to USD2.8 billion with GAAP database and middleware new licence revenues up 5 percent, and applications new licence revenues up 77 percent. Services revenues rose 9 percent to USD671 million compared to the same quarter last year.

The growth in Europe is especially welcome news to the firm as it tries to take on SAP, which has a strong hold in the region.

"We reported record revenues for the quarter and delivered non-GAAP EPS of 19 cents," said Oracle president and CFO, Safra Catz, in a statement. "Our non-GAAP operating margins reached record levels for the quarter as well, exceeding all previous third quarter results."

However, despite the boost in profit, database sales did not meet analysts expectations, causing shares in the firm to slump.

The company has embarked on a series of acquisitions in an attempt to grab market share from SAP, including its most recent acquisition, Siebel. It has also confirmed that it is looking at three open source software firms.

"Oracle's product strategy is based on a combination of innovations and acquisitions," said Larry Ellison, CEO of Oracle, in a statement.

"Over the last several weeks we announced our internally developed Secure Enterprise Search technology, and the completion of the Siebel acquisition. As a result, Oracle now has strong product offerings in both Search and Software as a Service. These two markets are red hot and will be engines for growth for Oracle and the entire software industry for years to come."

Oracle currently employs more than 900 people in Dublin in a sales, software development and localisation operation, with plans to establish a new EUR1.6 million operation in Belfast to support its UK and Republic of Ireland customers. Worldwide, Oracle currently has more than 57,000 employees.

However, it recently announced that it is to cut more than 2,000 jobs following the completion of its Siebel acquisition.