Software maker Oracle Corp’s results for its latest quarter topped Wall Street’s forecast on Tuesday, despite a 5 percent drop in sales and a 7 percent decline in profit.
The company blamed the declines on the effects of a stronger US dollar — which makes deals done in other currencies translate into fewer greenbacks. Companies also have been shelling out less for new software because of the recession.
Still, Oracle’s chief financial officer Jeff Epstein said in a statement that Oracle executed “substantially better” than the company expected. A key reason was better sales of support contracts, which are a cash cow for Oracle even in bad times.
“It’s kind of hard to complain, isn’t it?” said Patrick Walravens, an analyst with JMP Securities. “Flawless might be a bit strong, but I think it was better than just about anybody expected ... The big question is, now what?”
There weren’t any big surprises in Oracle’s guidance, which is a good thing considering the uncertainty about the economy. Oracle offered a sales forecast for the current quarter that was slightly better than expected, while its profit forecast was within the expected range.
The stock was up US$0.51, or 2.6 percent, to US$20.38 in after-hours trading. During the regular session, before the results were announced, Oracle shares closed down US$0.10 at US$19.87.
Oracle, which is based in Redwood Shores, said that its net income from March through last month was US$1.89 billion, or US$0.38 per share. In the same period last year, it was US$2.04 billion, or US$0.39 per share.
Excluding stock-based compensation and one-time items, Oracle said it earned US$0.46 per share, which was US$0.02 better than the average estimate of analysts polled by Thomson Reuters.
Sales fell to US$6.86 billion, nearly US$400 million better than the analyst estimate.
The latest period was Oracle’s fiscal fourth quarter. For all of fiscal 2009, Oracle’s sales rose 4 percent to US$23.25 billion.
Full-year profit was US$5.59 billion, a 1 percent increase over fiscal 2008.
For the current quarter, Oracle expects revenue to decline 1 percent to 4 percent from last year. Analysts had been predicting a 5 percent decline.
Profit should be US$0.29 to US$0.31 per share, excluding one-time items, Oracle said. Analysts were expecting US$0.30 per share.