Oracle sales boost profits

City A.M. Reporter
ORACLE yesterday said fiscal first-quarter profit rose a better-than-expected 20 per cent, helped by strong sales of new business software and faster-than-expected growth of its new hardware business.

The world’s third largest software maker, which sells business software database systems and now server hardware through its recent purchase of Sun Microsystems, reported net profit of $1.35bn (£864m), compared with $1.12bn in the year-ago quarter.

Sales rose 50 per cent to $7.6bn, helped by the acquisition of Sun Microsystems earlier this year. Analysts were expecting $7.27bn, on average.

New software sales -- which generate long-term maintenance contracts, signaling future profitability -- were up 25 per cent to $1.3 bn. The company had forecast three months ago they would rise between two per cent and 12 per cent.

Oracle’s shares were up nearly three per cent at $26.10 after closing at $25.36 on the Nasdaq.

The company is expected to make a forecast on sales of new software for the current quarter.

Chief executive Larry Ellison and new president Mark Hurd -- the former Hewlett-Packard (HP) chief executive who joined Oracle earlier this month -- are expected to make the announcement. Hurd has officially started his new role at Oracle, even as his former employer has launched a law suit against him.