Oracle Takes Hit on Sun Costs but Records Solid Q3

By Chris Preimesberger  |  Posted 2010-03-25 Print this article Print

Oracle's quarterly profit slipped by 11 percent due to the enterprise database and middleware maker's digestion of the $7.4 billion deal that brought it Sun. Nonetheless, the company reports profit of $1.19 billion, or 23 cents per share, for the quarter ended Feb. 28.

Oracle, after a tumultuous 2009 during which it acquired Sun Microsystems and battled IBM and SAP in the markets, reported March 25 that it came through the last quarter in good financial shape-despite the expensive legal and regulatory issues surrounding the Sun deal.

The enterprise database and middleware maker's quarterly profit slipped by 11 percent due to its digestion of the $7.4 billion deal that brought it Sun. Nonetheless, the company reported profit of $1.19 billion, or 23 cents per share, for the quarter ended Feb. 28.

The profit margin was down from $1.33 billion, or 26 cents per share, in 2009.

Oracle's buyout of Sun closed on Jan. 27. Oracle Chief Financial Officer Jeff Epstein said the acquisition added $458 million in revenue to the company's fiscal third quarter but restructuring and operating costs took their toll on the bottom line.

"The Sun integration is going even better than we expected," Oracle President Safra Catz told listeners on a conference call. "We believe that Sun will make a significant contribution to our fourth-quarter earnings per share as well as meet the profitability goals we set for next year."

Oracle's third-quarter GAAP (Generally Accepted Accounting Principles) total revenues were up 17 percent to $6.4 billion over 2009, while non-GAAP total revenues were up 18 percent to $6.5 billion.

New licensing revenue from database and middleware products improved by 13 percent, Epstein said.

CEO and co-founder Larry Ellison told conference call listeners that the company continues to snare "huge chunks of market share" from Germany-based rival SAP.

"SAP's products are fraying around the edges," Ellison said. "They're running on 25-year-old code. Our products beat them in so many ways."

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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