SAN FRANCISCO (AP) — Snapping out of a summertime lull, Oracle's latest quarter demonstrated that companies have been splurging on software and other technology as the year comes to a close, despite uncertainty about the economy's prospects.
The results announced Tuesday are an improvement from Oracle's previous quarter, when the business-software maker's revenue dipped slightly from a year earlier.
The most recent quarter spanned September through November. That makes Oracle the first technology bellwether to provide insights into corporate spending since the Nov. 6 re-election of President Barack Obama. It's also the first to report since negotiations to avoid the so-called fiscal cliff began to heat up in Washington.
The solid performance by one of the world's biggest technology suppliers suggests corporate decision makers aren't fretting too much about the economy falling off the cliff. The fiscal cliff refers to the combination of wide-ranging increases in taxes and cuts in government spending that will be automatically triggered Jan. 1 unless the White House and Congress can reach an agreement on how to soften the impact.
"As can see in our numbers, folks wanted to spend their budgets, continue to want to spend their budgets," Safra Catz, Oracle's chief financial officer, said in a conference call with analysts. "We are having an absolutely wonderful December so far."
Forrester Research analyst Andrew Bartels described Oracle's performance as encouraging, but said it's still too early to conclude other major technology vendors catering to big companies have been recording similar late-year gains. "This is good news, but it's not definitive," he said.
Oracle Corp. earned $2.6 billion, or 53 cents per share, in its fiscal second quarter. That's an 18 percent increase from net income of $2.2 billion, or 43 cents per share, a year ago.
If not for charges for past acquisitions and certain other costs, Oracle said it would have earned 64 cents per share. On that basis, Oracle topped the average earnings estimate of 61 cents per share among analysts surveyed by FactSet.
Revenue increased 3 percent from last year to $9.1 billion — about $900 million more than analysts had projected.
In a particularly heartening sign, Oracle said sales of new software licenses and subscriptions to its online services climbed 17 percent from last year to outstrip the most optimistic predictions issued by management three months ago. Bartels said the increase isn't quite as good as it looks because it includes contributions from two online subscription services, RightNow Technologies and Taleo, that Oracle didn't own at the same time last year. Oracle bought RightNow for $1.5 billion in January and acquired Taleo for about $2 billion in April.