Oracle meets rosy expectations
Despite profits being hurt by a one-time charge, Oracle reports a net first-quarter income of $40.5 million. But analysts say the company's future success depends on its ability to evolve.
Oracle reported net first-quarter income of $40.5 million, or 4 cents a share, compared with net income of $112.8 million, or 11 cents a share, for the same quarter a year ago.
Excluding the charges, the company would have reported a 36 percent jump in
net income to $149.8 million, or 15 cents a share--exactly in line with
predictions from First Call.
Revenue for the quarter was $1.36 billion, up 30 percent from the $1.05 billion in revenue reported during the same period one year ago.
Oracle?s stock gained 1-9/16 to close at 39-9/16, up from yesterday?s close of 38.
Oracle?s steady growth was led by application sales, which Oracle said grew 96 percent. Revenue from services such as customer support was up 42 percent, while licensing and other sales grew by 15 percent, the company added.
Two analysts said Oracle?s success in providing new services and products tailored to specific industries would drive growth. For years, they said, Oracle was known for its general-purpose applications, a model that has become less viable over time.
"Oracle has a healthy future, especially as it makes the transition to becoming more of an applications company and a total solutions company," said Esther Schreiber, an analyst at Credit Suisse First Boston.
"They're focusing more on a lot of the specific needs that companies within certain industries, like telecommunications, have," said Jim Pickrel, an analyst at Hambrecht & Quist. During the quarter, Pickrel added, Oracle has realigned its sales and support groups around the so-called vertical market concept.