informa
/
Government
News

Oracle Reports 19% Q2 Sales Growth

Oracle expects to complete its Siebel acquisition in early '06.
Oracle reported a 19% surge in revenue during its second quarter ended Nov. 30, but a stronger U.S. dollar took a bite out of the software giant's earnings.

Oracle reported revenue of just under $3.3 billion for the quarter, up from less than $2.8 billion year-over-year. But net income was $798 million, down 2% from one year earlier. Oracle said earnings would have climbed 3% without the currency fluctuations.

During a conference call Thursday, president and CFO Safra Catz said Oracle expects to complete its acquisition of customer-relationship-management application vendor Siebel Systems Inc. in early 2006. The acquisition received approval from the U.S. Dept. of Justice last month and Oracle is still seeking approval from the European Union.

Catz also said that users of software from PeopleSoft, which Oracle acquired in January, have been "renewing their subscription services and buying more software" at rates that show PeopleSoft customers are not fleeing to Oracle competitors. Leading up to the acquisition there had been questions about whether Oracle would have difficulty retaining PeopleSoft's customer base.

During the call president Charles Phillips touted recent customer wins for Oracle's applications, adding, "We're really going after the SAP installed base with this vertical [market] strategy."

Oracle said software revenue in the second quarter exceeded $2.6 billion. That included new software license sales, which increased 9% to nearly $1.1 billion, and revenue generated by software license updates and product support that grew 18% to $1.5 billion. Services-related revenue increased 26% to $675 million. Database and middleware new license sales were up 5% to $785 million while sales of application new license sales were up 26% to $675 million.

Catz said revenue in the current quarter would grow between 9% and 12% to between $3.4 billion and $3.5 billion. Software revenue will grow between 10% and 14% to between $2.7 billion and $2.8 billion.