1:00PM New York - Oracle Corporation second quarter net earnings jump 35%, beat expectations.

Revenue Performance

Oracle Corporation, the second largest software maker reported second quarter revenue increase of 28% to $5.3 billion from a year ago, on GAAP basis.

The company reported strong revenue growth across major business lines. In the quarter, software revenues climbed 29% to $4.2 billion.

Sales of new software licenses, a closely watched indicator of future revenue, climbed 38% to $1.7 billion. Oracle had forecast that the bookings would increase between 15% and 25%.

Database and middleware new license revenues rose 28% while applications new license revenues rocketed 63%.

Services revenues increased 22% to $1.2 billion, compared to the same quarter last year.

Earnings Performance

Oracle said that second quarter net income rose 35% to $1.3 billion.

Earnings surged 36% to 25 cents per share from a year earlier. Operating margins rose to 41% as the company slashed expenses.

Analysts polled by Thomson Financial had expected earnings of 27 cents per share on revenues of $5.04 billion.

Second quarter non-GAAP net income grew 38% to $1.6 billion translating into earnings of 31 cents per share, up 40% on prior year.


Oracle is benefiting more from its dedicated acquisition strategy, which has seen the group spent in excess of $24 billion to acquire 42 companies in the past four months.

Company chief financial officer Safra Catz said in a conference call with analysts: ""The strength of the quarter comes down to the fact that we are selling more products to more customers in more industries.""

Catz explained that Oracle thrived even amid the widespread financial turmoil that has resulted from the subprime mortgage meltdown, an outcome she chalked up to the company''s ""broad, highly diversified customer base, both by industry and geographically.""

Revenue and earnings outlook

Oracle guided third quarter revenue increase in the range 21% and 24% in the current, which ends in February.

The company expects to earn between 29 cents and 30 cents per share, excluding option expenses. Analysts expect Oracle to earn 29 cents per share and revenues to increase 18% in the third quarter to $5.4 billion.

Shares of Oracle were up about 6.5% to $22.11 on the earnings news in after-hours trading Dec.19. Over the past 52 weeks, the stock has traded in the range $15.97 to $23.31. Analysts are targeting a one-year price of $25.82.