Oracle posts strong Q4, full-year results

Showing strong growth amid a worldwide economic downturn, Oracle on Wednesday reported fourth-quarter revenues of US$7.2 billion, a 24 per cent rise compared to the same quarter last year, and total revenue for fiscal 2008 of US$22.4 billion, up 25 per cent.

Fourth-quarter earnings per share were up 27 per cent to 39 cents over the same quarter in 2007, and net income also rose 27 per cent, to US$2 billion. For the fiscal year, earnings per share stood at US$1.06, a rise of 30 per cent. Net income for the year was US$5.5 billion, up 29 per cent.

Excluding one-time charges, analysts polled by Thomson Financial had on average predicted earnings per share of 44 cents for the fourth quarter and US$1.27 for the year.

Oracle’s adjusted results beat those estimates, at 47 cents per share for the quarter and US$1.30 for the fiscal year.

Fourth-quarter software revenues rose 26 per cent to US$6 billion.

Wall Street is increasingly viewing Oracle as a bellwether for the tech space overall, and even the larger economy.

Oracle is making pushes into new verticals as part of its growth strategy. This week it announced the acquisition of Skywire Software, maker of software for the insurance industry. That move followed its recent announcement that it planned to buy AdminServer, another insurance software maker.

Also this week, Oracle said it is forming a new health and sciences business unit.

Meanwhile, the company recently pushed through a series of hefty price increases on its products.

For example, a CPU license for its database is now US$47,500, up from US$40,000. Oracle also appears to have raised prices for software it gained through its recent acquisition of BEA.

List prices aren’t necessarily what customers pay for software products, as the cost often gets lowered dramatically through negotiations, but now the baseline for talks is higher, said Ray Wang, an analyst with Forrester Research, in a previous interview.

In a blog post, Wang said the weak dollar is “the main rationale” behind Oracle’s move, as the company maintains a single worldwide price list.

“Unlike many vendors who account for global currency fluctuations with country, region, and industry specific uplifts, Oracle maintains consistent pricing in dollars,” he wrote. “The dramatic devaluation of the dollar has led to a de-facto discount in the 30 to 35 per cent range for multi-nationals who purchase in pounds sterling, euros, and to a lesser extent, yen.

“As a result, price increases mainly impact the U.S. while other Euro-zone countries will not see a major increase in real-dollar terms,” he added.

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