Oracle Q1 Profit Rises, Tops View; But Revenue Misses

(RTTNews) - Oracle Corp. (ORCL) Wednesday reported an 8 percent increase in profit for the first quarter, driven mainly by software revenue growth with new software licenses and cloud subscriptions improving. Oracle's profit for the quarter trumped analysts' estimates, but revenues fell short of expectations.

Software revenues for the quarter increased to $6.08 billion from $5.71 billion last year. New software licenses and cloud software subscriptions increased to $1.65 billion from $1.57 billion last year.

Hardware systems revenues dropped to $1.26 billion from $1.35 billion last year, with corporate customers preference now shifting to cloud-based systems compared to the company's servers, databases and related programs.

Oracle's revenues for the quarter grew 2 percent to $8.37 billion. On an adjusted basis, revenues grew to $8.38 billion from $8.21 billion last year. Analysts polled by Thomson Reuters expected revenues of $8.48 billion for the quarter.

Oracle has adopted an acquisition-led growth strategy, and recently acquired DataRaker, Eloqua Inc. (ELOQ) and network gear maker Acme Packet Inc. (APKT).

Safra Catz, Oracle President and CFO, observed, "Non-GAAP earnings per share increased 12% to $0.59, the best ever result for the first quarter of our fiscal year. Those record level earnings were enabled by an operating margin of 45% for the quarter. We also set a free cash flow record of over $6 billion in Q1, and then we returned half of that to our stockholders by repurchasing $3 billion of our shares in the quarter."

Redwood City, California-based Oracle's first-quarter profit rose to $2.19 billion or $0.47 per share from $2.03 billion or $0.41 per share last year.

Adjusted earnings improved to $0.59 per share from $0.53 per share a year ago. Analysts estimated earnings of $0.56 per share for the quarter. Analysts' estimates typically exclude special items.

Oracle declared a dividend of $0.12 per share, payable on October 29 to shareholder on record as of October 8.

ORCL closed Wednesday's trading at $33.87, up $0.61 or 1.83%, on the NYSE. The stock further gained $0.26 or 0.77% in after hours.