Oracle reported net income of $1.03 billion, or 20 cents a share, under generally accepted accounting principles [GAAP]. Non-GAAP earnings were 25 cents a share, which beat Thomson Financial consensus estimates of 23 cents a share. Revenue was $4.4 billion, which was also ahead of projections and up 27 percent from a year ago.
By the numbers:
Total software revenue was up 25 percent; Database and new license revenue was up 17 percent; Applications new licenses were up 57 percent; On-demand revenue was $142 million, up 48 percent from the prior year; Oracle has 70,481 employees and of that some 46,228 are international.
And the trash talking:
Notably, CEO Larry Ellison said Oracle replaced Red Hat (RHT) for Linux support at Yahoo (YHOO). Oracle's Linux support, which is aimed at undercutting Red Hat, is off to a solid start with Dell and others reselling service. Ellison also noted that Oracle has sold some large enterprise contracts.
Ellison didn't disclose sales for Oracle's Linux business, but indicated he was confident. "This is just the beginning," said Ellison, referring to the Linux support business. "We're not going to build it overnight, but we will build it."
Ellison also to a swipe at BEA:
"Our middleware new license sales grew 82% in the third quarter and 62% over the last twelve months," said Ellison. "This compares to BEA's growth rate of 8% in their most recently reported quarter and 12% over their last year. Not only are we growing faster than BEA, we're now larger than they are in the middleware business."
Reality: That's a little hard to determine since Oracle lumps middleware and database sales together.
On other topics, Ellison ripped SAP –a quarterly occurrence–and its strategy to target the midmarket with A1S. "We have a good chance to catch and surpass SAP in the applications business," said Ellison.
"Our applications new license sales grew 57% in the third quarter and 61% over the last twelve months," said President, Charles Phillips. "This compares to SAP's growth rate of 7% in their most recently reported quarter and 10% over their last year. Although SAP is still larger than Oracle in the applications business, we are closing the gap consistently and rapidly."
Reality: Most of Oracle's growth is due to acquisitions compared to SAP's organic growth so the comparison is difficult. For the nine months ending Feb. 28 Oracle reported total software revenue of $9.4 billion. A portion of that tally ($3.2 billion) is applications for those nine months.
Meanwhile, SAP, which has its own rebuttal, reported total software revenue of $1.68 billion in the fourth quarter of 2006 and $4.1 billion for all of 2006 (currency conversion assumes 1 euro equals $1.33). Bottom line: Comparing the two is apples and oranges since the companies don't report or divvy up their divisions the same way.