Oracle Corp. (ORCL: Quote) said Monday after the markets closed that its fourth quarter profit rose 8% from last year, helped by higher sales of its softwares even though hardware and service revenue fell.
The company's quarterly earnings per share, excluding items, also came in above analysts' expectations as did its quarterly revenue.
Oracle also said that its board of directors has authorized the repurchase of up to an additional $10 billion of common stock under its existing share repurchase program in future quarters.
Oracle shares are currently gaining 2.88% in after hours trading after closing the day's regular trading session at $27.12, down 58 cents or 2.09%. The shares trade in a 52-week range of $24.72 to $34.13.
Oracle's total software revenues for the fourth quarter increased 6% year-over-year to $8.1 billion. New software license revenues for the quarter grew 7% from a year earlier to $4.0 billion, the eleventh consecutive quarter of growth.
Fourth quarter software license updates and product support revenues grew 5% year-over-year to $4.2 billion. Service revenues for the quarter fell 4% from last year at $1.2 billion.
Hardware systems revenues for the quarter fell 14% at $1.6 billion, with hardware systems products revenue down 16% and hardware systems support revenue down 11%.
"The development of Oracle Cloud is strategic to increasing the size and profitability of Oracle's software business," said Oracle Chief Executive Officer, Larry Ellison. "Our Oracle Cloud SaaS business is nearly at a billion dollar revenue run rate, the same size as our engineered systems hardware business. The combination of engineered systems and the Oracle Cloud will drive Oracle's growth in FY 2013."
Oracle's acquisition-led growth strategy continues to pay dividends. The company has acquired more than 70 companies since 2005. The company completed its much awaited $7.4 billion acquisition of Santa Clara, California-based Sun Microsystems in January 2010.
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.
Of late, Oracle has set its eyes on cloud-based software firms. In January, the company completed the acquisition of RightNow Technologies, Inc. for $1.5 billion in an effort to offer a broader range of cloud solutions to its customers. The company completed its $1.9 billion acquisition of Taleo Corp. in April.
For the fourth quarter ended May 31, 2012, Redwood Shores, California-based Oracle reported net income of $3.5 billion or $0.69 per share, compared to $3.2 billion or $0.62 per share for the year-ago quarter.
Excluding items, adjusted net income for the fourth quarter was $4.1 billion or $0.82 per share, compared to $3.9 billion or $0.75 per share in the prior year quarter.
On average, 37 analysts polled by Thomson Reuters expected the company to earn $0.78 per share for the fourth quarter. Analysts' estimates typically exclude special items.
Operating margin for quarter improved to 42% from 40% a year earlier, while adjusted operating margin grew to 50% from 48% last year.
Total revenue for the fourth quarter rose 1% to $10.92 billion from $10.78 billion a year ago, while adjusted revenue for the quarter also increased 1% to $10.95 billion from $10.81 billion last year. Thirty-five analysts had a consensus revenue estimate of $10.89 billion for the fourth quarter.
Without the impact of a stronger U.S. dollar, fourth quarter revenue would have been up 5% and earnings pee share would have been up 16%, the company said.
Oracle also declared a quarterly cash dividend of $0.06 per share, payable on August 3 to shareholders of record on July 13.
Actually, the world's second largest software maker surprised investors by releasing its quarterly results Monday, while it was originally scheduled for Thursday.
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by RTT Staff Writer
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