Oracle Issues Second Quarter Earnings Guidance In-line With Consensus

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Last Update: 21-Sep-11 09:39 ET

Oracle (ORCL $30.30 +1.95) reported first quarter earnings of $0.48 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus Estimate of $0.47.

Non-GAAP revenues rose 10.7% year/year to $8.40 billion versus the $8.35 billion consensus.

Non-GAAP new software license revenues were up 17% to $1.5 billion; non-GAAP software license updates and product support revenues were up 16% to $4.0 billion. Non-GAAP hardware systems products revenues were down 5% to $1.0 billion. Non-GAAP operating income was up 21% to $3.6 billion, and non-GAAP operating margin was 42%.

"Our high-end server business -- Exadata, Exalogic, and SPARC M-Series -- delivered solid double digit revenue growth in Q1. 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."

On the conference call after hours yesterday, the company guided Non-GAAP EPS in the range of $0.56 to $0.58, Capital IQ consensus $0.56; revenues expected to rise 4% to 8%, Capital IQ consensus $9.34 billion or approx +8.2% year/year.