Oracle earnings solid; takes on SAP, IBM

Oracle earnings solid; takes on SAP, IBM

Summary: Oracle reported Thursday fiscal first quarter net income of $840 million, or 16 cents a share, on revenue of $4.5 billion.

SHARE:

Oracle reported Thursday fiscal first quarter net income of $840 million, or 16 cents a share, on revenue of $4.5 billion. Excluding items, Oracle reported earnings of 22 cents a share, a penny better than Wall Street estimates.

Breaking the numbers down, Oracle reported software revenue of $3.5 billion, up 26 percent from a year ago. Database and middleware revenue was up 23 percent and applications new license revenue was up 65 percent. The company projected second quarter earnings of 26 cents a share to 27 cents a share excluding items. Those results would be in line with Wall Street estimates, according to Thomson Financial.

Oracle said it was taking share from SAP, which will likely beg to differ.

Oracle president Charles Phillips said in a statement:

"In Q1 Oracle's applications new license sales grew 65% compared to SAP's new license sales growth rate of 18% in their most recently completed quarter. We like our growth strategy of expanding into high-end industry specific vertical software as opposed to SAP's growth strategy of moving down market to sell software to small companies."

CEO Larry Ellison took on IBM and noted that Oracle wants the middleware market share crown. Ellison said:

"If we continue to grow our middleware software business at the same rate we grew it this quarter, Oracle will challenge IBM for the number one position in middleware by the end of this year."

A few notable figures:

  • New software licenses totaled $1.08 billion in the first quarter, up 35 percent from a year ago.
  • Consulting revenue was $801 million, up 25 percent from a year ago; on-demand revenue was $158 million, up 27 percent from a year ago; and education was $100 million, up 24 percent from a year ago.
  • By geography, the Americas produced first quarter revenue of $2.37 billion followed by Europe, Middle East and Africa with $1.53 billion in revenue. Asia Pacific accounted for $624 million in revenue.
  • Oracle had 77,652 employees at the end of the quarter.

Topics: SAP, Banking, Enterprise Software, IBM, Oracle, Software

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

2 comments
Log in or register to join the discussion
  • What Oracle isn't telling you...

    They're strongarming their customer base on license renewals and forcing acquisition of their app server software. You either pay up and buy app server software that you won't use, or else you had better find a quick replacement for your ERP (like that's possible).
    Uber Dweeb
    • RE: What Oracle isn't telling you...

      But none of that would explain the 65% growth in applications new license revenue, would it?

      Of course 65% isn't an organic number. By my math adjusting for Hyperion, Agile, and a host of smaller acqusitions you can take about 40 points off that figure. That would still suggest 25% organic license growth, ahead of most of the competition.

      So what's driving it?
      Jason C