Oracle: Sun profitable; Exadata sales pipeline nears $1 billion

Summary:Oracle pulled off a Sun miracle: An operating profit. Meanwhile, Exadata, database and applications finished the fourth quarter strong.

Oracle delivered a better-than-expected fourth quarter courtesy of strong hardware sales---notably an operating profit at Sun and strong sales of Exadata database machines.

The company on Thursday reported earnings of $2.4 billion, or 46 cents a share, on revenue of $9.5 billion (statement, preview). Non-GAAP earnings were 60 cents a share, well ahead of the 54 cents a share expected by Wall Street. Sales were in line with expectations, but Oracle's profit got a boost from better-than-expected hardware sales.

Sun contributed about $400 million in non-GAAP operating income. You could call the performance Oracle's Sun miracle. In a statement, Oracle CFO Jeff Epstein said Sun had $1.2 billion in systems revenue. Oracle president Safra Catz said:

Now that Sun is profitable, we have increased confidence that we will meet or exceed our goal of Sun contributing $1.5 billion to non-GAAP operating income in FY2011, and $2.0 billion in FY2012.

Also on the hardware front, Oracle CEO Larry Ellison talked up his pet project: The Exadata database machine. Ellison also took aim at IBM:

Some of IBM's largest customers began buying Exadata machines rather than big IBM servers in Q4 of FY2010. And the FY2011 Exadata sales pipeline is fast approaching the $1 billion mark.

With all this talk about hardware, you could almost forget that Oracle is selling its database and applications.

Here's a look at the moving parts:

Other key figures:

  • Oracle ended its fiscal year with 104,569 employees down from 106,492 a quarter ago.
  • Revenue in the Americas for the fourth quarter was $4.88 billion, up from $3.46 billion a year ago. Europe, Middle East and Africa revenue in the quarter was $3.15 billion, up from $2.41 billion. Asia Pacific revenue in the quarter was $1.46 billion, up from $985 million a year ago.
  • On Demand revenue was $295 million in the fourth quarter, up from $204 million a year ago.
  • For the year, Oracle reported net income of $6.1 billion, or $1.21 a share, on revenue of $26.8 billion, up 15 percent from a year ago.

Topics: Oracle, Banking, Enterprise Software


Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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