Oracle's (ORCL) fiscal first-quarter profit increased 20% from a year earlier as the world's No. 2 software company to Microsoft (MSFT) generated higher revenue from a jump in software-license sales.

Oracle performed better than analysts expected largely because of new license sales and gains from its recent acquisition of Sun Microsystems earlier this year for about $7.4 billion. Minus some one-time charges, Oracle earned 42 cents per share in the quarter, better than the expected 37 cents a share on $7.27 billion in revenue, according to analysts surveyed in a Thomson-Reuters poll.

"Our software-licensing growth was outstanding," said Safra Catz, co-president of Oracle, on a conference call with analysts today. "We have a lot of company-specific momentum in each line of business."

The company expects to boost earnings further as it further integrates Sun, whose gross margins have increased by 10 percentage points since Oracle bought Sun, Oracle CEO Larry Ellison said on the call today, adding that Oracle expects to double the size of Sun's business. Catz said fiscal second-quarter year-over-year revenue growth will be as much as 47%.

"We believe Oracle is finally getting some credit for value creation from Sun, although we believe upside to estimates this year can drive this further," Citigroup wrote in a Sept. 14 note to clients. The investment bank has a "buy" rating on the stock with a $28 price target.

Oracle gained attention earlier this month when it hired former Hewlett-Packard (HPQ) CEO Mark Hurd to be a co-president along with Catz. HP has in turn sued Hurd, alleging that he risks violating confidentiality agreements because Oracle became a competitor in the server industry when it acquired Sun. "There's really no one else in the market with the software and hardware assets that can match Oracle," said Hurd, who didn't mention HP on the call.

Hurd stepped down as the HP chief last month after he was accused of sexual harassment by a contractor (the charge was later dropped) and a resulting internal investigation found that he made unauthorized payments to the contractor.

Oracle shares advanced 4.3% to $26.45 at about 6:20 p.m. Eastern time in after-hours trading today.


Increase your money and finance knowledge from home

Portfolio Basics

What are stocks? Learn how to start investing.

View Course »

Introduction to ETFs

The basics of Exchange Traded Funds and why ETFs are hot.

View Course »

Add a Comment

*0 / 3000 Character Maximum

1 Comment

Filter by:
fallordn

Software license produced gains? what about Sales Tax Hotel Tax School Tax Liquor Tax Luxury Tax Excise Taxes Property Tax Cigarette Tax Medicare Tax Inventory Tax Car Rental Tax Real Estate Tax Well Permit Tax Fuel Permit Tax Inheritance Tax Road Usage Tax CDL license Tax Dog License Tax State Income Tax Food License Tax Vehicle Sales Tax Gross Receipts Tax Social Security Tax Service Charge Tax Fishing License Tax Federal Income Tax Building Permit Tax IRS Interest Charges Hunting License Tax Marriage License Tax Corporate Income Tax Personal Property Tax Accounts Receivable Tax Recreational Vehicle Tax Workers Compensation Tax Watercraft Registration Tax Telephone Usage Charge Tax Telephone Federal Excise Tax Telephone State and Local Tax IRS Penalties (tax on top of tax) State Unemployment Tax (SUTA) Federal Unemployment Tax (FUTA) Telephone Minimum Usage Surcharge Tax Telephone Federal Universal Service FeeTax Gasoline Tax (currently 44.75 cents per gallon) Utility Taxes Vehicle License Registration Tax Telephone Recurring and Nonrecurring Charges Tax Not one of these taxes existed 100 years ago, & our nation was the most prosperous in the world. We had absolutely no national debt, had the largest middle class in the world, and Mom stayed home to raise the kids. We also were A Common Law Country! I have set up a place that the poor and middle class in the country can start to get some of this tax money back. It is our turn to have a piece of the action. Here is my way to get your loot back. Just google EASY STOCK CASH and click the first link. Once you get there, go right to the PENNY STOCK page to see what the rich don't want you to know.

September 16 2010 at 8:12 PM Report abuse rate up rate down Reply