REDWOOD SHORES (dpa-AFX) - Oracle Corp. (ORCL) said Thursday after the markets closed that its fourth quarter profit rose 36% from last year, helped by strong sales of its softwares and services. The company's quarterly earnings per share, excluding items, also came in above analysts' expectations as did its quarterly revenue. However, the company's shares fell in after hours trading due to weakness in its hardware sales.
The world's second largest software maker reported GAAP net income for the fourth quarter of $3.2 billion or $0.62 per share, compared to $2.4 billion or $0.46 per share for the year-ago quarter and $2.1 billion or $0.41 per share for the previous sequential quarter.
Excluding stock options expense, amortization of intangible assets, restructuring charges and other items, non-GAAP net income for the fourth quarter was $3.9 billion or $0.75 per share, compared to $3.0 billion or $0.60 per share in the prior year quarter and $2.8 billion or $0.54 per share in the prior quarter.
On average, 35 analysts polled by Thomson Reuters expected the company to earn $0.71 per share for the fourth quarter. Analysts' estimates typically exclude special items.
GAAP operating margin for the fourth quarter was 40%, compared to 35% in the fourth quarter of last year and 34% in the third quarter.
Non-GAAP operating margin for the fourth quarter was 48%, compared to 46% in the fourth quarter of last year and 44% in the third quarter.
Redwood Shores, California-based Oracle said total GAAP revenues for the fourth quarter rose 13% to $10.78 billion from $9.51 billion a year ago, while non-GAAP revenue increased 12% to $10.81 billion from $9.63 billion last year. Sequentially, fourth quarter GAAP and non-GAAP revenue grew 23% and 22.7%, respectively. Thirty-four analysts had a consensus revenue estimate of $10.75 billion for the fourth quarter.
'In Q4, we achieved a 19% new software license growth rate with almost no help from acquisitions,' said Oracle President and CFO, Safra Catz. 'This strong organic growth combined with continuously improving operational efficiencies enabled us to deliver a 48% operating margin in the quarter. As our results reflect, we clearly exceeded even our own high expectations for Sun's business.'
Catz was appointed CFO in April following the resignation of Jeff Epstein. He is not new to the job as she earlier served as Oracle CFO for nearly three years.
Oracle said total GAAP software revenues for the fourth quarter increased 17% year-over-year to $7.7 billion. GAAP new software license revenues for the quarter rose 19% from a year earlier to $3.7 billion, the seventh consecutive quarter of growth.
Fourth quarter GAAP software license updates and product support revenues surged 15% year-over-year to $4.0 billion. Service revenues for the quarter grew 13% to $1.2 billion.
Hardware systems revenues for the quarter remained flat with last year at $1.8 billion. Hardware systems products revenue fell 6% to $1.2 billion, while hardware systems support revenue increased 12% to $673 million.
'In addition to record setting software sales, our Exadata and Exalogic systems also made a strong contribution to our growth in Q4,' said Oracle President, Mark Hurd. 'Today there are more than 1,000 Exadata machines installed worldwide. Our goal is to triple that number in FY12.'
Oracle also declared a quarterly cash dividend of $0.06 per share, payable on August 3 to shareholders of record on July 13.
Although Catz said the 19% new software license growth in the latest quarter was achieved with almost no help from acquisitions, Oracle is reaping the benefits of its past acquisitions. It has acquired more than 68 companies since 2005. The company completed its much awaited $7.4 billion acquisition of Santa Clara, California-based Sun Microsystems in January last year.
The acquisition of Sun was Oracle's biggest acquisition since its $8.5 billion takeover of BEA Systems Inc. in 2008 and the $11.1 billion acquisition of PeopleSoft Inc. in early 2005.
In January this year, Oracle completed its $1 billion acquisition of ecommerce software provider Art Technology Group, Inc.
Earlier this week, Oracle said it is has entered into an agreement to buy FatWire Software, a provider of web experience management solutions. The deal is expected to close mid-year 2011.
At the same time, Oracle is also entangled with some legal disputes. Technology giant Hewlett-Packard Co. (HPQ) said earlier this month that it has sued Oracle over the enterprise software giant's decision that it would no longer develop software that runs on Intel Corp.'s (INTC) Itanium microprocessors. The lawsuit seeks unspecified damages and an injunction preventing Oracle from making misleading statements in the future.
However, Oracle has denied HP's claims on breach of an agreement. Oracle said that HP explicitly asked it to guarantee continued support for Itanium while framing the agreement, but was refused by Oracle and the support guarantee clause was deleted in the final signed agreement in September 2010.
Also, Oracle is seeking billions of dollars in damages in its Java patent- and copyright-infringement lawsuit against Internet giant Google Inc. (GOOG), according to a filing in San Francisco federal court. The suit, which claims Google's Android software uses technology related to the Java programming language, was filed by Oracle in August 2010 after Java became a part of it through the acquisition of Sun Microsystems. Google's Android is a smartphone operating system that it licenses to mobile-phone makers.
Oracle shares, which have traded in a range of $21.24 to $36.50 over the past year, closed Thursday's regular trading session at $32.46, up 26 cents. The stock is currently losing $2.11 or 6.50% in after hours trading.
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