from bloomberg;
Oracle Second-Quarter Net Income Climbs 40%, Exceeding Highest Estimates
By David Ward
Oracle's 2nd-Qtr Net Income Climbs 40%, Beating Estimates
Redwood Shores, California, Dec. 14 (Bloomberg) -- Oracle
Corp., the world's No. 1 database software maker, said its fiscal
second-quarter earnings rose 40 percent, beating even the most
optimistic forecasts as software applications sales soared.
Net income rose to $384 million, or 26 cents a share in the
quarter ended Nov. 30, from $274.1 million, or 19 cents a share,
a year ago. That beat the 22-cent average estimate of analysts
polled by First Call Corp. The ''whisper'' estimates were as high
as 25 cents. Revenue rose to $2.32 billion from $2.1 billion.
Oracle benefited from a surge in the number of companies
seeking software to do business on the Internet, and was able to
further reduce its costs, boosting its net income, analysts said.
''Oracle has a very effective and broad product list that
offers very effective solutions to company's needs,'' said Bill
Epifanio, an analyst at J.P. Morgan Securities with a ''buy''
recommendation on Oracle. ''The whole e-commerce wave, which is
undeniable, plays right to Oracle's strength.''
Oracle shares rose as high as 81 in trading on electronic
networks after the 4 p.m. EST close. In regular trading on the
Nasdaq, shares fell 2 7/8 to 76 15/16.
Oracle shares have more than doubled since the start of its
fiscal second quarter, spurred by growing optimism among
investors that the company would post strong sales growth this
year and into next year, and was set to capitalize on the growing
number of companies buying software to do business on the
Internet.
''Oracle is one of the leading platforms for the new
economy,'' said Alex Kotlyar, a C.E. Unterberg Towbin analyst
who has a ''buy'' rating on Oracle.
Oracle said it's on track to reduce expenses by $1 billion
by June, a pledge that Chief Executive Larry Ellison made earlier
this year. It's begun consolidating its internal computer systems
and using its own sales information-management software.
''Six months ago we said that our goal was to save $1
billion out of our cost structure within 18 to 24 months
primarily by using our own Internet applications,'' Chief
Financial Officer Jeff Henley said in a statement. ''This
quarter's 5.5 percentage points of pre-tax margin improvement is
another installment payment marking substantial progress toward
that goal.''
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