Ottawa Citizen

Oracle prof it hits estimates as customers open wallets

- BY ROCHELLE GARNER

Oracle Corp., the world’s second-largest software maker, reported third-quarter profit that met analysts’ estimates after customers bought programs they had delayed purchasing during the recession.

Profit before acquisitio­n and some other costs was 38 cents a share in the period ended Feb. 28, the company said. Analysts in a Bloomberg survey estimated 38 cents on average. Including deferred revenue from Sun Microsyste­ms Inc., which Oracle acquired in January, sales were $6.47 billion U.S. Analysts estimated $6.32 billion.

Chief executive officer Larry Ellison has spent $41.8 billion buying 62 companies since January 2005. Each purchase added customers, and Oracle seeks to sell them almost every kind of software a company might want, from databases to middleware to business applicatio­ns. License sales rose to $ 1.72 billion as companies renewed spending.

“Oracle is benefiting from an economic rebound,” said Sarah Friar, an analyst with Goldman Sachs Group Inc. “ They are executing well with databases and middleware, which is less dependent on customers’ headcount than on data volumes.”

Shares of Oracle rose 28 cents to $ 26.04 in Nasdaq Stock Market trading. Net income fell to $1.19 billion, or 23 cents a share, from $1.33 billion, or 26 cents, a year earlier. Revenue before adjustment­s increased to $6.4 billion.

Goldman Sachs expects global technology spending to rebound this year, increasing five per cent. Large companies in the U.S. will provide a “modest” contributi­on to total revenue growth, the firm estimates.

To maintain growth, Ellison set Oracle on an acquisitio­n spree that moved the company beyond its database software. Today the company competes against SAP AG, the world’s biggest maker of business-management software, handling tasks such as accounting, inventory and human resources.

With the $7.4-billion acquisitio­n of Sun, Oracle gained the fourth-biggest maker of server computers, marking Oracle’s entrance into the hardware market. Oracle has said it will get out of Sun’s low-margin, high-volume server business, focusing instead on more prof itable, high-performanc­e servers.

Oracle is second to Microsoft Corp. in software revenue.

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