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Oracle sales climb on strength of new software

Oracle CEO Larry Ellison speaks at the company's headquarters in Redwood City

Reuters

Oracle Corp. posted better-than-expected quarterly revenue as sales of new software licenses jumped and announced an extra $10-billion in share buybacks, in a report that came several days ahead of schedule.

Shares of Oracle rose 3 per cent in extended trading.

Oracle on Monday posted a 1 per cent gain in quarterly revenue to nearly $11-billion in the quarter. Wall Street had expected the company, which competes with SAP and Salesforce.com in providing software to corporations, to post revenue of $10.89-billion, according to Thomson Reuters I/B/E/S.

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New software sales, an indicator of future performance, rose to $4-billion in the fiscal fourth quarter, the company said in a statement.

"You had a beat on the top line, a beat on the bottom line, and a beat on licenses," said Pacific Crest Securities analyst Brendan Barnicle. "All in all, in a uncertain environment, that's a pretty good result."

Global technology companies like Oracle and International Business Machines are bracing for a potential weakening in technology spending as the euro zone crisis deepens and U.S. job creation remains static.

It was not immediately clear why Oracle had decided to announce its fiscal fourth quarter earnings results on Monday, rather than as scheduled on Thursday. Some analysts speculated that unconfirmed rumors earlier on Monday that Oracle's head of U.S. sales was leaving the company may have been a factor.

"I'm wondering if that's why they pre-announced early, just to try to quell any speculation as to why that was occurring," said Oppenheimer & Co. analyst Brian Schwartz.

Oracle's fourth-quarter results were better than expected, Mr. Schwartz said, though he noted that the company's forecast for the coming quarter, expected during a conference call with analysts later on Monday, will be the most important piece of information.

Net income gained 8 per cent to $3.45-billion, or 69 cents per diluted share, in the quarter ended May, from $3.21-billion, or 62 cents per share, a year earlier. Excluding items, the company earned 82 cents a share, outperforming the 78 cents expected.

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Revenues from Europe, the Middle East and Africa slid 7 per cent to $3.3-billion in the quarter, reflecting tightening IT budgets as economic uncertainty swirls.

Oracle has been trying to turn around an ailing server hardware business inherited through its acquisition of Sun Microsystems, but that division remained a drag on the overall company. Hardware product sales dived 16 per cent to $977-million, continuing to shrink.

The stock jumped to $27.90 from a close of $27.12 on Nasdaq.

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