Oracle reported on-target quarterly earnings Friday that rose 28 percent over the same period last year, despite a downturn in new software license sales.
The Redwood Shores, Calif.-based company reported net income of $440 million, or 8 cents per share, on revenue of $2.07 billion in its fiscal first quarter. That compares with $342.7 million in net income, or 6 cents per share, on revenue of $2.03 billion in the year-ago quarter. The earnings matched projections from a consensus of analysts surveyed by First Call. Oracle reported that software license sales were down 7 percent to $525 million in its first quarter, while software license renewals and support contracts sales rose by 14 percent to $1 billion. First-quarter operating margin was 30 percent versus 29 percent last year, the company said.
"Once again, the quarter showed positive growth in total revenues, and we expect to see continued improvement in total revenue and new license growth in (the second quarter) led by North America," Oracle Chief Financial Officer Jeff Henley, said in a statement. "In addition, Oracle generated over $1.25 billion in cash as our profitability continues to hit record levels." Industry analysts were less upbeat, describing the quarter as a serious disappointment given the downturn in new software license sales.
Meta Group analyst John Van Decker said Oracle made a "big push" to hit sales numbers during its fiscal fourth quarter, but warned that the shortfall in new licenses in the first quarter could indicate that a recovery in overall IT spending remains elusive.
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News source: C|net