|By Maureen O'Gara||
|September 24, 2012 08:00 AM EDT||
Oracle turned in its fiscal Q1 scorecard Thursday when the market closed and said earnings were up 11% to $2 billion (41 cents a share) on revenues down 2% to $8.2 billion. Wall Street expected $8.4 billion
New software licenses and cloud software subscriptions revenues were up 5% to $1.6 billion, none of it due to a large deal. The cloud portion, which it broke out for the first time, amounted to $222 million mostly in the US and Asia-Pac. Software license updates and product support revenues were up 3% to $4.1 billion.
Hardware, however, plummeted 24% to $779 million.
Co-president Mark Hurd said, "Exadata, Exalogic, Exalytics and our other engineered systems grew more than 100% in the quarter. For the full year, we expect to double engineered systems sales to well over $1 billion. Oracle's new cloud business is also approaching a $1 billion annual run rate. These two businesses will drive Oracle's growth for years to come."
Oracle is supposed to trot out cloud enhancements and SaaS additions at OpenWorld, which starts October 1. It's going to go into the IaaS public cloud business and offer customers duplicate gear in their data centers as the basis of a private cloud that Oracle will manage so users can communicate with the Oracle public cloud, CEO Larry Ellison said.
It's not clear yet what hardware they propose to use underneath.
That'll cover Oracle's bases on the SaaS, PaaS and IaaS fronts. Ellison claimed Oracle has more SaaS offerings than anybody else. The company's promising to be aggressive, helped along by analytics.
Oracle is also going to wheel out a cloudified version of its database designated 12c for cloud for people to ooo and aaaah over but it won't be available until December or January. Ellison called it a "pluggable" multi-tenant database where users can co-exist in virtual instances without their data touching.
Hurd said the Oracle salesforce was reorganized into dedicated contingents last quarter to accommodate the hot human capital management (HCM) market, where Oracle has made some recent acquisitions. He said they're moving a lot of product.
The company claims it's seeing Salesforce and Workday, but not SAP in sales automation and HR, where it uses social networking to add value.
Ellison's determined not to eat the dust of newfangled competitors.
Without the dollar strengthening Oracle said its GAAP EPS would have been three cents higher or 44 cents, up 24%. CFO Safra Catz declared it a "good start to the year" with this currency business masking the company's real strength. Some outsiders disagreed.
She guided to revenues this quarter being flat to up 4% against expectations of a 5% increase and earnings between 59 cents and 63 cents versus Wall Street forecasts of 61 cents. She also predicted - again, if memory serves - a return to pre-Sun margins soon. She may have said this quarter but whatever she said was garbled. Oracle's operating margin in Q1 was 35%.
Hurd said hardware revenue would be negative 8% to negative 18% despite his bragging that Oracle has the hottest Unix box with the advent of the new T4 chip and the 10x data compression of the Exadata box, which is supposed to save users simply scads of money on storage.
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