Software company saw revenue growth of 30% or higher across its geographic footprint
Oracle Corp.'s fiscal third-quarter profit surged 78% to top the business-software company's expectations, as Oracle experienced strength from its traditional software and new hardware businesses.
Investors shrugged off a miss on hardware revenue to focus on strong margins and a surge in license revenue. The company's shares rose 4% to $33.44 in after-hours trading. Through the close, Oracle's shares are up 26% the past year.
The company, which sells software, database systems and now server hardware through its $7.4 billion acquisition of Sun Microsystems in early 2010, on Thursday said the performance was broad based, with all geographic areas reporting revenue growth of 30% or higher.
Operating margins were 44% for the quarter, about the same level as a year ago, except that this year's figure includes a full quarter of results from the hardware business Oracle acquired when it bought Sun Microsystems. Gross margins from the hardware unit alone were 55%.
The margins were the result of strong demand for the Exadata and Exalogic database and cloud computing products, said Mark Hurd, president of Oracle's hardware business. Oracle also is selling fewer low-margin third-party products, he said.
Success in hardware also contributed to a 29% increase in new software license revenue, Hurd said. Besides earning good margins, hardware sales "pull a lot of software with them," he told analysts on an earnings call.
Oracle has posted strong bottom-line results over the past year, as the top line benefited from Sun's hardware offerings and increased revenue from new licenses and services.
For the quarter ended Feb. 28, Oracle posted a profit of $2.12 billion, or 41 cents a share, up from $1.19 billion, or 23 cents a share, a year earlier. Excluding stock-based compensation, restructuring costs and other impacts, per-share earnings rose to 54 cents from 38 cents. The latest quarter included a penny of benefit per share from a lower tax rate. But even then, the earnings clearly beat the consensus estimate of analysts of 50 cents a share.
Revenue climbed 37% to $8.76 billion. In constant-currency terms, it grew 35%
