Oracle prof it hits estimates as customers open wallets
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.