Oracle sales down, but gaining ground in Europe

Oracle late yesterday reported new software sales had dropped 13 per cent in its last financial quarter to $7.1 billion (4.3 billion).

At the same time though, it posted overall fourth quarter (Q4) 2009 results that beat the general analyst consensus and reported market share gains from arch European rival, SAP.

Overall, during the quarter ending 31 May, it posted net income of $1.9 billion (1.2 billion), or $0.38 (23 pence) per share, on $6.9 billion (4.2 billion) in revenue. Analyst expectations, as polled by Thomson Reuters, were of $0.44 (27 pence) per share on about $6.5 billion (4 billion) in revenue.

Compared to last year though, and in line with falling software sales, overall revenue still fell 5 per cent compared to the same quarter in 2008, while quarterly net income was down 7 per cent.

At the same time, overall software revenue, including new licences, updates and product support, also dropped 3 per cent in the quarter, to $5.8 billion (3.5 billion).

But fiscal 2009 year revenues were actually up 4 per cent to $23.3 billion (14.2 billion), annual net income was up 1 per cent to $5.6 billion and earnings per share would have grown by 19 per cent were it not for the impact of the exchange rates.

Safra Catz, Oracle president said: "That's an amazing achievement given what's been happening in the global economy over the past twelve months."

Charles Phillips, Oracle president preferred to also highlight the vendor's success at the expense of its arch-rival, SAP. "We grew faster and took market share from SAP in every region around the world," he said.

"In Europe our applications business grew 5 per cent in constant currency, versus negative 27 per cent growth for SAP in their most recent quarter. Historically Europe has been an SAP stronghold, but these results prove that we can compete and beat them everywhere," added Phillips.

Jeff Epstein, Oracle chief financial officer also said it had executed substantially better than expected on both the top and bottom line for the quarter. "We grew Q4 non-GAAP [general accounting principles] operating margins by a faster-than-expected 240 basis points to over 51 per cent," he explained. "That helped us generate $7.7 billion [4.7 billion] in free cash flow for fiscal 2009."