Sun helps Oracle profits up 25%
30 June 2010
With Oracle's recent purchase of Sun Microsystems in January 2010, Oracle's strategy of consolidation continues. Oracle's profits increased by 25% and an increase of 15% in overall revenues to $26.8m (all figures quotes are based on the GAAP quoted figures). Oracle's figures included four months of Sun trading.
Interestingly Sun's Q4 figures (after acquisition) were profitable - contributing to Oracle's profits. "We estimate that Sun contributed over $400 million to non-GAAP operating income in our Q4," said Oracle President, Safra Catz. "This compares with a loss in Sun's quarter ending June of last year, when Sun was an independent company. Now that Sun is profitable, we have increased confidence that we will meet or exceed our goal of Sun contributing $1.5 billion to
non-GAAP operating income in FY2011, and $2.0 billion in FY2012."
The figures were better than forecast. "We executed better than expected on both the top and bottom line for the quarter," said Oracle CFO, Jeff Epstein. "This strong performance plus disciplined business management led to a non-GAAP operating margin of 46% in Q4, fully including the $1.2 billion of Sun systems hardware that we sold in the quarter."
As is usual in any annual statement from Oracle, Oracle president Charles Phillips could not resist a dig at SAP. "We continue to take large chunks of market share away from SAP. Over the last twelve months Oracle's applications business has grown 5% on a constant dollar basis while SAP's business has declined 24% over their previous four quarters. This trend has been going on for a long time: Oracle's applications business has grown 60% in the last four years while SAP's business is 7% smaller than it was four years ago."
Finally, a statement of intent was made by Larry Ellison as it relates to Sun hardware. "Version 2 of our Sun Exadata database machine outperforms IBM's fastest computer in both data warehousing and transaction processing," said Oracle CEO, Larry Ellison. "As a result, some of IBM's largest customers began buying Exadata machines rather than big IBM servers in Q4 of FY2010. And the FY2011 Exadata sales pipeline is fast approaching the $1 billion mark."
