Database software giant reports better than expected 4Q profit. Sales are in line with estimates.
June 15, 2004: 4:51 PM EDT
NEW YORK (CNN/Money) - Oracle Corp., which remains embroiled in a hostile takeover battle for rival software firm PeopleSoft, reported fiscal fourth-quarter earnings that were slightly better than expected, and improving sales.
Still, the stock fell slightly after-hours as investors had been hoping for even higher sales of new software.
The Redwood Shores, Calif.-based company reported net income of $990 million, or 19 cents a share, a 15 percent increase from the $858 million, or 16 cents a share, Oracle earned in the same period a year ago. Analysts were expecting Oracle to report earnings of 18 cents a share.
Revenues came in at $3.076 billion, up 8.5 percent from $2.83 billion a year ago and a hair better than Wall Street's $3.07 billion consensus estimate.
Sales of new software licenses, a widely watched measure of demand, came in at $1.31 billion, up 10.6 percent from $1.18 billion a year ago. Oracle told investors in March that it expected new license sales to increase between 5 percent and 15 percent from last year's fourth quarter. The remainder of Oracle's revenues come from license updates, product support and services.
Shares of Oracle tumbled nearly 2 percent after hours according to INET after gaining about 1.4 percent on the Nasdaq Tuesday in anticipation of the earnings report.
The stock is down 11 percent year-to-date and has lagged major software competitors since announcing its troubled bid for PeopleSoft more than a year ago. PeopleSoft has rejected four different offers from Oracle. In addition, the U.S. Department of Justice is suing to block the merger on antitrust grounds. A trial began in San Francisco last week.
For the full year, sales rose 7 percent to $10.2 billion and earnings per share increased 16 percent to 50 cents a share.
And although Oracle Chief Financial Officer and Chairman Jeff Henley pointed out in a written statement that the company's full fiscal year operating profit of $3.9 billion was "the best operating profit we've ever delivered; even better than our best year during the Internet bubble," that did not seem to be enough to excite Wall Street.
Oracle's flagship database business reported another strong quarter, with new licenses increasing 15 percent from a year ago, to $1.08 billion. But Oracle's applications software business reported a 6 percent drop in new software licenses from a year ago to $231 million.
The applications software business has become the subject of much interest among investors during the past year. Oracle is trying to buy PeopleSoft in order to bulk up its presence in the applications market, selling software to businesses that helps automate routine tasks such as customer relationship management and payroll functions.
The applications market is seen as being very lucrative, so lucrative that software giant Microsoft announced last week that it had held merger discussions with industry leader SAP last year.
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