Oracle today reported better-than-expected second-quarter earnings, revenue that was lighter than estimates, and hardware system product sales that fell 23 percent from a year ago.
Oracle reported second-quarter earnings of $2.6 billion, or 53 cents a share, on revenue of $9.1 billion, up 3 percent from a year ago. Non-GAAP earnings were 64 cents a share.
Wall Street was expecting Oracle to report second-quarter earnings of 61 cents a share on revenue of $9.02 billion.
New license and cloud revenue was up 17 percent in the second quarter from a year ago. License and support revenue was up 7 percent from a year ago. But hardware systems products saw a revenue plunge of 23 percent.
Oracle added that a strong U.S. dollar clipped second-quarter earnings by a penny a share.
In a statement, Safra Catz, co-president and CFO of Oracle, said that operating margins on a non-GAAP basis were 47 percent due to engineered systems and software sales.
Meanwhile, Mark Hurd, co-president of Oracle, cited momentum in cloud offerings and subscriptions.
On the hardware front, Oracle's business on the top line continued to struggle. Nevertheless, CEO Larry Ellison defended the acquisition of Sun. He said:
Sun has proven to be one of the most strategic and profitable acquisitions we have ever made. Sun technology enabled Oracle to become a leader in the highly profitable engineered system segment of the hardware business. I believe that products like Exadata and the SPARC SuperCluster will not only continue to drive improved profitability in our hardware business, by the end of this fiscal year, they will also drive growth in our hardware business.
The challenge for Oracle is to find the bottom in its hardware business and grow revenue in future quarters.
By the numbers:
- Oracle ended the quarter with 117,229 employees.
- Revenue in the Americas in the second quarter was $4.78 billion.
- EMEA sales were $2.7 billion and Asia-Pacific revenue was $1.6 billion.
This story originally appeared at ZDNet's Between the Lines under the headline "Oracle Q2 mixed; Ellison defends Sun acquisition."