Oracle Corp reported a 15 percent rise in second-quarter profits amid rising demand for its business software, providing the latest hopeful glint in high-tech's brightening outlook.
The Redwood Shores, California-based company said Monday it earned US$617 million, or US$0.12 per share, in the quarter ended Nov. 30, compared with net income of US$535 million, or US$0.10 per share, at the same time last year.
Revenue totaled US$2.5 billion, up 8 percent from US$2.3 billion a year earlier.
The earnings were a penny better than the estimate of analysts surveyed by Thomson First Call.
Jeff Henley, Oracle's chief financial officer, described the quarter as Oracle's most encouraging performance since the company slipped into a slump with the rest of the high-tech sector in late 2000.
"Business optimism seems to be improving for the first time in several years and that should improve technology spending," Henley said during a Monday conference call with reporters. "We can see no reason why [the trend] shouldn't continue."
Oracle released its results after the stock market closed Monday. The company's shares fell US$0.13 to US$12.70 on the NASDAQ, then added US$0.28 in extended trading.
With its upbeat quarterly report, Oracle joins other prominent high-tech bellwethers, including chip maker Intel Corp and network equipment maker Cisco Systems Inc, that have provided financial evidence of an industry upturn.
Oracle's performance bodes well for the majority of software makers that close their quarters at the end of this month, said industry analyst Cameron Steele of RBC Capital Markets. Investors often look to Oracle as a proxy for the rest of the software industry because the company's fiscal quarters end earlier than most of its rivals.
It marked the fourth consecutive quarter in which Oracle's earnings improved upon from the results from the comparable year-ago period.
Oracle's earnings gains in previous quarters stemmed largely from rigid cost controls and consulting fees that helped the company offset lackluster demand for its software.
Solid sales growth propelled Oracle in its latest quarter as corporate customers stepped up their technology spending.
Oracle's new software licenses totaled US$849 million in the quarter, a 13 percent increase from US$752 million at the same time last year. The weak dollar helped to boost Oracle's international sales. If not for favorable currency fluctuations, Oracle said its software sales would have increased by 5 percent.
The company made its biggest strides in business software applications, a segment that has become a focal point in Oracle's long-term growth plans. The company sold US$137 million in applications licenses during the quarter, a 27 percent increase from US$108 million at the same time last year.
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