Oracle has reported revenue of $3.1bn for its fourth
quarter, up 9% from a year earlier, while its operating margin was
at its highest ever.
Net income for the quarter, which ended 31 May was $990m
(£541m) up 15% from $858m in the same period a year earlier, Oracle
said.
Software revenue climbed 12%, to $2.5bn, while services revenue
dropped 4% to $558m. Sales of new database licences grew 15%,
helped by speedy sales of its latest 10g database and related
add-ons.
Operating income came in at $1.4bn for the quarter and $3.9bn
for the full year. Oracle's operating margin for the quarter was
46%.
"We had a very strong finish to a very good year," said Jeff
Henley, Oracle's chairman and chief executive officer.
Oracle has spent the past 12 months trying to pull off a hostile
takeover of applications rival PeopleSoft. It is currently in court
battling the US Department of Justice's efforts to block the merger
on competition grounds. European regulators have also expressed
concerns about the deal.
The effort may not have distracted Oracle's sales teams but it
has chewed up some of its cash. General and administrative expenses
for the year included $54.2m of professional services fees
connected to the takeover bid, Oracle said.
Henley said that sales of Oracle's core database product are not
growing especially well, but said add-on products such as its Real
Application Cluster software and Enterprise Manager, are helping to
lift sales.
RAC, which is for clustering groups of servers, got off to a
slow start, but sales of the software increased 60% in
the financial year which ended 31 May compared with the previous
year, said Larry Ellison, Oracle's chief executive officer.
Revenue from application licences declined 6% in the quarter,
but climbed 2% for the full year.
Oracle planned to release an upgrade to its E-Business Suite 11i
in the middle of the year - version 10 - focused on integration and
business intelligence, Ellison said.
Oracle's application server business, in which it competes
primarily with market leaders IBM and BEA Systems, is doing
particularly well, Ellison said. Sales of new licences grew 15% in
the quarter, while BEA's licence revenue declined.
"We think we're doing extremely well against BEA and IBM in
application server market share," Ellison said.
Oracle is stepping up its efforts to target Microsoft in the small-
and mid-sized business market. It launched a low-priced version of
its database last year, called Standard Edition One, for use on
two-processor systems, and is partnering with more systems
integrators and independent software suppliers.
Oracle hopes to exploit the "new window of opportunity" opened
up by the delayed release of Microsoft's next big database upgrade,
codenamed Yukon, Henley said.
Sales growth was strongest in the Americas and Europe, with the
Asia-Pacific region doing less well. On the whole, however,
business continues to improve gradually worldwide, with businesses
starting to commit to more big projects.
Looking ahead to the first quarter of 2005, Oracle expected
revenue growth of 6% to 9% from a year earlier, with growth from
new software licences in the range of 5% to 15%.
"We expect business will continue to improve modestly and we
believe our competitive position will improve," Henley said.
James Niccolai writes for IDG News Service