RealTime IT News

New Software Licenses Power Oracle Profit

Rising database sales were the bread and butter behind Oracle's fiscal fourth quarter profit, but the PeopleSoft division also played a key role in the company's results.

Net income for the quarter ending May 31 was $1.02 billion, or 20 cents per share, a 32 percent increase over the year-ago period. Total revenues were $3.88 billion, up 26 percent over the $3.08 billion it took in last year, while it was still chasing the hostile bid for enterprise software provider PeopleSoft.

The results cleared a number of consensus expectations by analysts and financial services firms that tally estimates on earnings.

Sales of new software licenses told the story -- even with the weaker dollar factored in to the results. During the quarter, Oracle's fiscal fourth quarter of 2005, new license sales rose 23 percent to $1.61 billion from the $1.31 billion it took in during the same year-ago period.

Company officials credited the swift integration of PeopleSoft within Oracle's operations. The quarter represented the first time that PeopleSoft's contributions to the bottom line were fully represented.

Oracle CEO Larry Ellison touted recent database research reports from Gartner, IDC and Morgan Stanley that said Oracle was increasing its share of the database market.

"This quarter marks an acceleration of that trend as more and more companies move their database applications off mainframes onto Oracle grids."

Safra Catz, president of Oracle, said the rapid integration of PeopleSoft into the company's business contributed to the strong growth in both applications sales and profits.

"The combination of increased organic growth plus a carefully targeted acquisition strategy have pushed Oracle's revenue and profits to record levels."

The results should help Catz smooth the transition for new finance chief Gregory Maffei, a former finance executive for Microsoft hired to replace Harry You, who left in March. Catz had stepped into the role temporarily.