Oracle Profits Up, but Revenues Slip

 
 
By Chris Preimesberger  |  Posted 2012-09-20
 
 
 

Oracle turned in a mixed quarterly earnings report Sept. 20, raising its profits by 11 percent in its fiscal Q1 2013 but missing overall revenue levels projected by a group of Wall Street analysts.

The Redwood City, Calif.-based business IT hardware and software company reported that its quarterly $2 billion profit marked an 11 percent upswing from the year-ago quarter. Oracle earned 41 cents per share for its stockholders, which was precisely what analysts surveyed by Thomson Reuters had predicted. Oracle had earned $1.84 billion, or 36 cents per share, in the same period last year.

However, Oracle also had to report that its sales for the three months ended Aug. 31 totaled $8.18 billion, down 2 percent -- or about $200 million -- from the same period a year ago. Analysts had expected sales to be $8.4 billion.

As a result, the stock slipped 1.5 percent in after-hours trading on the Nasdaq index to $32.26, down about 50 cents on the day.

EMEA Currency Fluctuations Problematic

Oracle, which does about 25 percent of its business in Europe, said it was hurt by weakening currencies in that region and in other parts of the world. Unfavorable currency changes resulted in fewer dollars for Oracle's products in the last three months compared to 2011.

If exchange rates had remained steady, Oracle said, its earnings per share would have been higher by 3 cents and that its revenue would have increased 3 percent.

Oracle continues to be steady in terms of selling new database and middleware licenses and cloud-service subscriptions, which rose 5 percent over 2011. Conversely, Oracle is still struggling in its hardware division, which makes servers, storage, switches, and other items. Total hardware revenue dipped 19 percent from a year ago.

Most of that hardware business was Sun Microsystems until January 2010, when Oracle bought the sinking company for $7.3 billion.

Ellison Talks About New 12C Database

During the conference call to analysts and journalist on Sept. 20, CEO and co-founder Larry Ellison revealed that the company will unveil its Oracle Database 12C ("C" is for "cloud") Sept. 30 at Oracle OpenWorld show in San Francisco.

"We're rolling the new version of the database with features specifically for the cloud," Ellison said. "I'm not I want to use the 'multi-tenant' term, but this will be a 'pluggable' database. This will allow multiple tenants to securely coexist in the same database. Then it's covered with virtualization, and we take a developer's approach to security, to make sure your data is isolated and private and safe and secure.

"This will be coming out (for general availability) in December, or January or February of next year -- within the next few months."

Oracle also is expected to unveil an updated version of its Exadata big data analytics server at OpenWorld.

Chris Preimesberger is Editor of Features and Analysis at eWEEK. Twitter: @editingwhiz

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