Sunday, 26 May 2013
Storage hardware sales at Oracle decline, profit up 8%
By James Niccolai, IDG News Service (San Francisco Bureau) | Jun 21, 2012
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PrintProfits at Oracle climbed 8 percent in the quarter just ended, though hardware sales declined and overall revenue was up only slightly, the company said Monday.
Oracle's net profit for the quarter, the fourth of its fiscal year, was US$3.5 billion, or $0.69 per share, the company said in its announcement, which was originally scheduled to occur Thursday.
Revenue came in at $10.9 billion, an increase of 1 percent from a year earlier. Sales of new software licenses increased 7 percent to $4.0 billion, while software license updates and support revenue climbed 5 percent to $4.2 billion.
New software license sales are considered a key indicator of growth and market health, as they suggest IT organizations are starting new projects. However, Oracle's aggressive acquisition strategy helps ensure the number keeps rising.
Sales of Oracle hardware, including the Unix systems business it acquired when it bought Sun Microsystems, were down 16 percent to $997 million, Oracle said.
For the full year, revenue was up 4 percent to $37.1 billion and profits were up 17 percent to $10 billion.
Market watchers have been closely monitoring the performance of Oracle's hardware division since it completed the Sun acquisition in January 2010.
Oracle has been de-emphasizing low-margin commodity hardware sales. The results show that its strategy of focusing on high-end machines such as Exadata and Exalytics, which combine Sun servers with Oracle software, is working well, executives said during a conference call Monday.
Sales of these "engineered systems" more than doubled year over year, according to co-President Mark Hurd. "I think what we saw in Q4 was some pretty material movements in terms of existing customers buying many more," Hurd said.
Revenue from the "Exa" systems will increase as companies see their performance, according to CEO Larry Ellison. "While the systems are very, very fast right now, they're getting even faster," he said.
