Oracle’s net income swells amid Hurd hiring hubbub

SAN FRANCISCO: Oracle Corp’s net income swelled 20% in the latest quarter as the world’s biggest maker of database software prospered from freer technology spending by corporations.

Oracle’s results, reported yesterday, came as the company finds itself in a starring role in Silicon Valley’s latest soap opera, this one involving Mark Hurd, the ousted chief of Hewlett-Packard Co.

Oracle has scooped Hurd up to help sharpen its attack on its longtime partner Hewlett-Packard Co.

Hurd’s hiring keys up the drama between Oracle and HP at a time when Oracle is muscling into HP’s turf by selling computer servers.

That’s a business Oracle picked up with the US$7.3bil (RM24bil) purchase earlier this year of Sun Microsystems, a struggling server maker and fallen idol of the tech world.

The theatrics over Hurd’s appointment as an Oracle co-president — a move HP has sued to stop — have overshadowed the fact that Oracle’s core business is thriving because businesses have pumped up their investments in the programs that run their backoffices.

Oracle is a bellwether because its software is ubiquitous but largely hidden from the public’s view. It’s used to keep bank transactions humming, airplanes landing on time and retailers’ shelves stocked with the right amount of merchandise, for example.

Oracle said yesterdat after the market closed that its net income was US$1.35bil (RM4.3bil), or 27 cents (86sen) per share, in the three months ended Aug 31. That compares with US$1.1bil (RM3.5bil), or 22 cents (70sen) per share, in the same period a year ago.

Excluding one-time items, earnings in the latest quarter came to 42 cents (RM1.34) per share, topping the 37 cents (RM1.18) per share that analysts polled by Thomson Reuters expected on that same basis.

Revenue was US$7.5bil (RM24bil), topping the US$7.27bil (RM23.3bil) analysts were expecting. That’s a 48% improvement from last year, when Oracle raked in US$5.05bil (RM16.2bil) in revenue. The latest quarter includes results from Sun Microsystems, which Oracle didn’t own at this time last year.

A closely watched figure for Oracle is always its sale of new software licences. Those are important because they signal how much Oracle will earn in the future from support contracts, which make up nearly half of Oracle’s revenue.

Oracle sold US$1.3bil (RM4.2bil) worth of new software licences in the latest quarter, 25% higher than last year. Oracle had predicted a range of US$1.05bil to US$1.15bil (RM3.4bil to RM3.7bil).

Oracle’s hardware division, which is made up of Sun’s assets, raked in US$1.7bil (RM5.4bil) in revenue. Oracle didn’t make a comparable figure for last year available.

In Hurd’s first public statement as an Oracle employee, he said that the company will invest more than US$4bil (RM13bil) in research and development this year, adding that “our already robust product portfolio is only going to get stronger.”

Last year, Oracle spent US$3.3bil (RM10.6bil) on research. Sun, which was admired by computer researchers for continuing to invest heavily in research even as the company’s finances faltered, spent US$1.6bil (RM5.1bil).

Even as layoffs continue and hiring, where it’s happening, is happening slowly, companies are pouring money into technologies that make them faster and more efficient.

Tech budgets were crippled last year in many industries. Although they have thawed since then for many businesses, there are worries that spending will falter amid fears the global economic recovery is sputtering.

Oracle added more than 650 workers in the latest quarter, bringing its employee count to 105,236 from 104,569 in the last quarter. — AP

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