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