Oracle beats Street estimates with impressive Q1 earnings report

Sales, net income easily exceed analysts' expectations

Well, Larry Ellison and the gang made that look easy.

Oracle Corp. this afternoon reported a big gain in profits and revenue for the first quarter ended in August, easily topping estimates by Wall Street analysts.

Net income for Q1 was $1.35 billion, or 27 cents per share, up from last year's Q1 figures of $1.12 billion, or 22 cents per share. Excluding one-time charges, Oracle's Q1 earnings were 42 cents per share, easily eclipsing FactSet Research's forecast of 36 cents per share and last year's figure of 36 cents per share.

Q1 revenue climbed 48 percent to $7.5 billion from last year's $5.06 billion. Analysts polled by FactSet had predicted sales of $7.3 billion.

In an official (under)statement, Oracle CFO Jeff Epstein said, “We executed better than expected on both the top and bottom line for the quarter.”

The report, delivered after Thursday's market close, had an immediate impact on the company's stock (NASDAQ: ORCL) as shares jumped 3.6 percent in after-hours trading to $26.27, 36 cents off the 52-week high.

One thing in particular that analysts were watching was the sale of new software licenses -- an indicator of a company's ability to attract new business. That number grew 25 percent over last year's Q1 total, reaching $1.3 billion, or 17 percent of total revenue.

Oracle also grew business with its existing customers, with license update and support revenue hitting $3.5 billion, an 11 percent hike over last year's Q1.

On the expense side, Oracle's R&D spending soared 67 percent to $1.1 billion, increasing to 15 percent of revenue, compared to 13 percent in last year's Q1. The company said it would essentially maintain that investment pace in research by spending better than $4 billion this year.

What’s wrong? The new clean desk test
Join the discussion
Be the first to comment on this article. Our Commenting Policies