First-quarter profit soars for Oracle

The world's third largest software developer Oracle is smiling cheek to cheek this month as it reported to have gained higher profit for this year's quarter compared to last year's. And just as many people in the industry have been speculating, the increase in profit has been boosted by the company's acquisition of other products. The results of the of the financial conference call was broadcast live at 2:00 p.m. (PDT) / 5:00 p.m. (EDT).

Oracle, whose specialization in software application is in business solution, reported that during this fiscal first quarter year, it has gained about $840 million which translates into 16 cents per share. In comparison, it only gained $670 million or 13 cents last year during the same period. Its revenue soared from $3.59 billion to $4.53 billion.

According to Safra Catz, Oracle President and CFO: “We reported new software license revenues up 35%, the strongest growth of any quarter in ten years. Software sales growth is translating nicely into EPS growth. We’ve now completed thirteen quarters of our five year EPS growth plan of 20% per year, and we are delivering earnings growth well ahead of that target."

Says an elated Oracle President Charles Phillips:

“We continue to take applications market share from SAP. In Q1 Oracle’s applications new license sales grew 65% compared to SAP’s new license sales growth rate of 18% in their most recently completed quarter. We like our growth strategy of expanding into high-end industry specific vertical software as opposed to SAP’s growth strategy of moving down market to sell software to small companies.

"Our Q1 database and middleware new license sales growth rate of 23% was the
highest in seven years. Oracle passed IBM to become the number one database company a long time ago. If we continue to grow our middleware software business at the same rate we grew it this quarter, Oracle will challenge IBM for the number one position in middleware by the end of this year.” quipped CEO, Larry Ellison.

This year's higher earning has been greatly buoyed up the sale of some products which were in the Oracle roster last year. These added products came from Hyperion Solutions, Stellent, MetaSolv and several other software solutions vendors.
Oracle now trades at about 16 times compared to the average outlook for the earnings per share of next year. This is slightly about Microsoft's 16 future price-to-earnings ratio.

Meanwhile, IBM, a technology services company and the number 2 software maker trades at 15 time earning. In terms of database technology, Oracle is still the leader ahead of IMB. In terms of business applications solution, Oracle ranks number 2 just behind Germany's SAP AG. Sap currently trades at 22 times estimated 2008 earnings. Oracle and SAP have been in constant tight competition for top spot in term so enterprise resource planning (ERP) software applications.
Oracle is the world’s largest enterprise software company and innovative solutions for virtually kinds of industries.