11:00AM New York—Oracle Corporation reported a better than expected fourth quarter earnings increase of 27% to $2 billion.

Revenue Increased More Than Expected

Oracle Corporation reported wider-than-expected fourth quarter revenue increase of 24% to $7.2 billion from $5.8 billion a year earlier, on GAAP based accounts.

The database and software provider said software revenues climbed 26% to $6 billion and helped calm investor worries technology firms would not be spared from the recession in the U.S economy.

Sales of new software licenses, a closely watched indicator of future revenue, rose 27% to $3.1 billion, better than management forecasts of between 10% and 20% three months ago.

Oracle said database and middleware new licence revenue gained 23% while applications new licence turnover rose 36%.

Revenue from software licence updates and product support increased 25% to $2.8 billion in the three months to May 31, the company said, and service revenue climbed to $1.3 billion, up 18% from the year before.

Fiscal year 2008 revenue rose 25% to $22.4 billion compared with $17.99 billion in 2007.

Acquisitions Help Earnings Growth

Oracle said that fourth quarter net income rose 27% to $2 billion or 29 cents per share from $1.6 billion or 31 cents per share the year before.

Minus acquisitions costs, the company said earnings were at 47 cents per share, better than forecast of 44 cents per share, according to analysts surveyed by Thomson Financial.

Operating margins rose to 41% from 39% although operating expenses rose to $4.3 billion from $3.5 billion a year earlier. Operating income gained 39% to $3 billion from $2.3 billion previously.

Oracle is benefiting more from its dedicated acquisition strategy, which has seen the group spend in excess of $35 billion to acquire 42 rivalry companies during the past year.

In April, Oracle finalised the purchase of BEA Systems Inc, a complimentary business for $8.5 billion, and provided $93 million to group sales in the quarter. The merger diversified the company’s software products.

The business software maker has also benefited from the acquisition of smaller firms like PeopleSoft and Siebel.

Oracle has thrived even amid the widespread financial turmoil that has resulted from the subprime mortgage meltdown.

For fiscal year 2008, GAAP earnings were up 30% to $5.5 billion or $1.06 per share from $4.27 billion or 83 cents per share.

Database Remains Big Business

Company chief executive officer Larry Ellison said in a conference call with analysts that database business remained top target.