* Fiscal Q1 EPS excl. items $0.42 versus Wall St view $0.37
* New software sales up 25 percent
* Shares rise more than 4 pct after hours
(Adds outlook, executive comments, background, byline)
By Bill Rigby
SEATTLE, Sept 16 Oracle Corp ORCL.O posted a
25 percent surge in software sales that sharply beat forecasts
and a pickup in its new hardware business, underscoring robust
tech spending by corporations and boosting its shares more than
Its quarterly earnings and revenue forecasts also exceeded
Wall Street's targets, despite recent pessimism among tech
companies about the economic recovery.
"Despite the fact that the economy is having difficulties,
for Oracle it continues to show that their consolidated
strategy continues to pay off," said Michael Yoshikami, chief
investment strategist at YCMNET Advisors.
Oracle said it expected non-GAAP earnings per share of 45
cents to 47 cents for the second fiscal quarter, versus
analysts' consensus forecast of 45 cents according to Thomson
"We do believe that the guidance I'm giving is realistic,
though conservative," Oracle President Safra Catz told
analysts. "I want to emphasize that our pipelines are very
strong in both software and hardware."
New software sales -- which generate long-term maintenance
contracts, signaling future profitability -- were up 25
percent at $1.3 billion. The company had forecast three months
ago a rise of between 2 percent and 12 percent.
Software sales are expected to rise by 9 percent to 19
percent in the current quarter at a constant currency rate.
"I don't believe there's any other company in the industry
that's better positioned," Oracle President Mark Hurd said on
his first earnings conference call since joining Oracle after
resigning from rival Hewlett-Packard Co (HPQ.N) under a cloud
of scandal in August.
The world's No. 3 software maker, which sells business
software, database systems and now server hardware through its
recent purchase of Sun Microsystems, reported net profit of
$1.35 billion, or 27 cents per share, compared with $1.12
billion, or 22 cents per share, in the year-ago quarter.
Excluding some items, it reported a profit of 42 cents per
share. That beat Wall Street's average estimate of 37 cents per
share, according to Thomson Reuters I/B/E/S.
Revenue rose 50 percent to $7.6 billion on a non-GAAP
basis, helped by the acquisition of Sun earlier this year.
Analysts were expecting $7.27 billion, on average. GAAP revenue
increased 48 percent to $7.5 billion.
"Our software business grew strongly in all regions," Catz
said in a statement. "Our hardware business also grew faster
than we expected with Sun Solaris servers and Exadata leading
Oracle's shares were up more than 4 percent at $26.46 after
closing at $25.36 on Nasdaq.
Hurd was named co-president of Oracle on Sept. 6, replacing
Charles Phillips, to work alongside Catz. [ID:nN06144965]
Shares of Oracle have gained nearly 11 percent since his
appointment was made public. (link.reuters.com/gyq24p)
HP has sued Hurd to stop him from working for Oracle,
fearing he will spill its trade secrets [ID:nN07242144].
"We want to grow and we want to grow profitably. We want to
take share," Hurd told analysts.
Oracle Chief Executive Larry Ellison said: "We look at IBM
(IBM.N) as our No. 1 competitor." He made no mention of rival
HP, which is in search of a new leader.
He added that his company would unveil a slew of new and
updated products, some aimed at business software rival SAP AG
(SAPG.DE), at Oracle's annual customer conference in San
Francisco next week.
(Reporting by Bill Rigby; Additional reporting by Liana Baker
and Alex Dobuzinskis; Editing by Matthew Lewis and Richard