Oracle Gains from Healthy Tech Spend

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Oracle Corp. exceeded Wall Street’s expectations posting a 25 percent surge in net income as the database software giant capitalized on healthy tech spending by corporations. The company’s shares rose nearly 5 percent.

The numbers are impressive. Oracle reported that it expected non-GAAP earnings per share of 45 cents to 47 cents for the second fiscal quarter, and new software sales topped 25 percent at $1.35 billion, or 27 cents per share, versus $1.12 billion, or 22 cents per share, a year ago. The company had forecast three months ago a rise of between 2 percent and 12 percent. What’s more, software sales are expected to increase by 9 percent to 19 percent in the current quarter at a constant currency rate. And revenue stood at $7.50 billion, representing a 48 percent increase from last year.

Oracle’s announcement falls on the heels of the company’s hiring of former Hewlett-Packard Co. CEO Mark Hurd as a president and board member. In a statement, Oracle said that Charles Phillips resigned as president and director. Hurd, who left HP last month after the company accused him of violating standards of business conduct, now works alongside Oracle president Safra Catz. HP has sued Hurd to stop him from working for Oracle.

Bringing Hurd on board lends Oracle some expertise in integrated hardware and software, and pits the company against high-tech titans such as HP and IBM. And next week Oracle is expected launch new products combining its software with that of Sun Microsystems, which Oracle picked up in a $7.30 billion acquisition earlier this year.

Smart acquisitions and savvy recruiting aside, more and more high-tech companies are banking on increasing technology spend among large enterprises in recessionary times to drive revenue. In fact, technology research company Gartner has forecast a 5.3 percent rise in global IT spending in 2010 to $3.4 trillion, after a 4.6 percent fall in 2009.




Edited by Juliana Kenny
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TechZone360 Contributing Editor

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