Software
The efforts helped push Oracles sales and profit above Wall Streets forecasts. Oracle also surprised investors by declaring its first dividend, a rare sign of confidence that comes as other bellwethers are cutting or suspending their dividends to save money.
Oracles shares jumped $1.11, or 7 percent, to $16.94 in after-hours trading Wednesday after Oracle reported its results. The stock had gained 43 cents, or 2.8 percent, to close the regular trading session at $15.83.
Oracles chief executive, Larry Ellison, called the numbers a “tremendous achievement in the face of the serious slowdown in the world economy.”
In Oracles fiscal third quarter, which covers December-February, Oracle said it earned $1.33 billion, or 26 cents per share, versus $1.34 billion, also 26 cents per share, in the year-ago period.
Subtracting out one-time charges, profit was 35 cents per share. That was 3 cents better than the average estimate from analysts polled by Thomson Reuters on that same basis.
Sales were $5.45 billion, a 2 percent increase over last year, though Oracle said revenue would have jumped 11 percent without the effect of a stronger dollar, which meant deals done in other currencies werent worth as much in dollars.
Analysts had predicted $5.42 billion in sales.
A closely watched number for Oracle is its sales of new software licenses, which is significant because it correlates to how much in support fees Oracle can hope to rake in in the future from those contracts.
Sales of new software licenses fell 6 percent to $1.5 billion, which was within the companys guidance. Some analysts had projected a far worse decline.
Oracles customers spent more in other areas, however. Sales from software license updates and product support were up 11 percent to $2.9 billion, which was more than half of Oracles total revenue for the quarter.
Oracles main business is selling database software and so-called “middleware,” which allows business computing applications to talk to each other – both areas that are under pressure because of the economic malaise.
But a key part of that is locking customers into long-term support contracts for that software. The support deals cover things like fixing software bugs and performing upgrades.
The company forecast weaker-than-expected numbers for the current period, which ends in May, but it wasnt enough to depress the stock.
Sales are expected to fall 10 percent to 14 percent over last year, when factoring in currency fluctuations, which translates to a range of $6.23 billion to $6.52 billion in the fiscal fourth quarter.
Analysts were projecting about $7 billion in revenue.
Profit should be 42 cents to 46 cents per share, excluding one-time charges, Oracle said. That figure is also adjusted for expected currency fluctuations. Analysts were predicting 46 cents per share.
Trip Chowdhry, a senior analyst with Global Equities Research, said Oracles numbers “clearly indicate there was no market-share loss” in the latest quarter, though he questioned Oracles decision to issue a dividend instead of paying down debt from the companys acquisition spree first.