Oracle reported another strong quarter Thursday, with first-quarter 2006 results driven by software sales and the successful integration of PeopleSoft into the organization, the company said.
Revenue for the period, which ended Aug. 31, came in at US$2.77 billion, up 25 percent from a year earlier. Software sales were particularly strong, growing 23 percent to US$2.13 billion.
Net income for the quarter was US$519 million, up 38 percent from a year earlier. Earnings per share were flat year over year at US$0.10 per share.
The above figures are according to generally accepted accounting principles, or GAAP. Oracle's non-GAAP earnings, which excluded certain business combination accounting entries and expenses, grew 38 percent to US$0.14 per share, the company said. That matched the consensus estimate of analysts polled by Thomson First Call.
In a conference call, Oracle Chief Executive Officer Larry Ellison also attributed growth in the quarter to license renewals, which were up 40 percent.
"It's our largest, most profitable part of our business," he said. "It's really driving our earnings growth."
Oracle's Java middleware business, too, was particularly strong in Q1, growing 33 percent year over year. On the call, Ellison predicted that Oracle will soon overtake competitor BEA Systems. for the number two spot in the Java middleware market and give IBM a run for its money.
"We are in the process of catching BEA," he said. "I think we will move ahead of BEA and challenge IBM for number one."
Ellison also reiterated comments made earlier in the week, at the Oracle OpenWorld conference, that hosted applications will become an increasingly important business at Oracle, particularly as the company absorbs Siebel Systems Inc., which has an on-demand CRM (customer relationship management) service that competes with Salesforce.com.
Oracle has its own On Demand business unit that offers hosted applications, the bookings of which were up 100 percent year-over-year, according to Ellison. "Customer satisfaction is way up [for On Demand]," he said.
Oracle last week announced it would purchase Siebel in a US$5.85 billion deal. On Thursday's earnings call, Oracle President and Chief Financial Officer Greg Maffei said the acquisition would add US$0.02 or US$0.03 per share to Oracle's earnings on a non-GAAP basis in the first year after it is approved.