Oracle Earns 48 Cents Per Share

Oracle ($ORCL) just reported its fiscal Q1 earnings of 48 cents per share. In my eyes, this was a disappointment. I was expecting earnings of at least 51 cents per share. The Street’s consensus was for 46 cents per share.

The next event will be the company’s earnings call which will contain the forecast for the current quarter. Three months ago, Oracle told us to expect earnings to range between 45 cents and 48 cents per share.

Revenue rose to $8.4 billion which was ahead of the Street’s forecast of $8.35 billion. In the past 12 months, Oracle’s cash flow is up 46%.

While Oracle fell short of my very optimistic forecast, the company still delivered solid results. In the after-hours market, the stock is slightly above today’s close (although the stock dropped 2.3% during the day).

Here are more details from today’s press release:

REDWOOD SHORES, CA–(Marketwire -09/20/11)- Oracle Corporation (NASDAQ: ORCL – News) today announced fiscal 2012 Q1 GAAP total revenues were up 12% to $8.4 billion, while non-GAAP total revenues were up 11% to $8.4 billion. Both GAAP and non-GAAP new software license revenues were up 17% to $1.5 billion. GAAP software license updates and product support revenues were up 17% to $4.0 billion, while non-GAAP software license updates and product support revenues were up 16% to $4.0 billion. Both GAAP and non-GAAP hardware systems products revenues were down 5% to $1.0 billion. GAAP operating income was up 40% to $2.7 billion, and GAAP operating margin was 32%. Non-GAAP operating income was up 21% to $3.6 billion, and non-GAAP operating margin was 42%. GAAP net income was up 36% to $1.8 billion, while non-GAAP net income was up 16% to $2.5 billion. GAAP earnings per share were $0.36, up 34% compared to last year while non-GAAP earnings per share were up 14% to $0.48. GAAP operating cash flow on a trailing twelve month basis was $12.8 billion, up 46% from last year.

“New software license sales grew 17%,” said Oracle President and CFO, Safra Catz. “This strong organic growth coupled with disciplined business management enabled yet another increase in our operating margin in Q1. Operating cash flow increased this quarter to $5.4 billion, up $1.6 billion from $3.8 billion in Q1 of last year.”

“Our high-end server business — Exadata, Exalogic, and SPARC M-Series — delivered solid double digit revenue growth in Q1,” said Oracle President, Mark Hurd. “In contrast, revenue declined in our low-end server business. By moving away from low-margin commodity hardware and focusing on high-end servers, we increased our hardware gross margins from 48% to 54%. Our strategy to grow the profitable parts of our hardware business is paying off.”

“Next week Oracle will announce a new high-performance SPARC microprocessor, and a new high-end server called a SPARC SuperCluster,” said Oracle CEO, Larry Ellison. “The new SPARC T4 microprocessor is up to 5 times faster than the T3 microprocessor it replaces. The new SuperCluster is engineered to use the SPARC T4 microprocessor and the Exadata flash and disk storage system to deliver extreme record-breaking performance.”

In the earnings call, Oracle said it expects fiscal Q2 earnings (ending in November) of 56 to 58 cents. Wall Street was expecting 57 cents per share.

Oracle notes that the comparisons are very tough. The Q2 from last year was very strong. They earned 51 cents per share which was five cents better than expectations.

Posted by on September 20th, 2011 at 4:06 pm


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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