Oracle (ORCL) Exceeds Q2 Expectations on Strong Software Sales

December 18, 2012 4:31 PM EST
Oracle (Nasdaq: ORCL) shares are ticking higher following second-quarter 2013 results showing strong profit growth on solid software sales.

Revs rose 3.4 percent to $9.09 billion, from $8.79 billion in the same period last year. Net income for Oracle improved 17.8 percent to $2.58 billion, or 53 cents per share. After adjusting for certain one-time items, earnings were 64 cents per share.

The Street was modeling revs of $9.03 billion and earnings of 61 cents per share.

Software sales improved 7 percent to $4.3 billion, while Hardware Systems revs dropped 16.3 percent to $1.32 billion.

Non-GAAP operating margin improved 2 points to 47 percent.

"New software license sales and cloud subscriptions grew 18% in constant currency," commented CFO Safra Catz. "During the last four quarters operating cash flow was more than $13.5 billion -- $10.2 billion of which was returned to our shareholders as we repurchased nearly 350 million ORCL shares during that same twelve month period."

President Mark Hurd chimed in, "Applications, middleware and database all had double-digit growth in new software license and cloud subscriptions, with applications leading the pack with growth of over 30%. Our cloud offering of HCM, CRM and ERP applications plus the Oracle database and Java platform services is the strongest and most complete in the industry."

Over the last nine quarters, Oracle has topped analyst earnings expectations in all but one. Shares are up 12.8 percent since that one miss, which happened during Oracle's fiscal second quarter last year.

On its call, Oracle said it sees third quarter non-GAAP EPS $0.64-$0.68, which compares to the Wall Street consensus of $0.66. They see revs up 1-5%.

In late Tuesday trading, Oracle is up 1.6 percent.

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