Oracle Corporation (ORCL)
Q3 2009 Earnings Call Transcript
March 18, 2009 5:00 p.m. ET

Executives

Roy Lobo – Head of Investor Relations
Jeffrey E. Epstein – Executive Vice President and Chief Financial Officer
Safra A. Catz – President and Director
Lawrence J. Ellison – Chief Executive Officer and Director
Charles E. Phillips, Jr. – President and Director

Analysts

Heather Bellini - UBS
Adam Holt - Morgan Stanley
Sarah Friar - Goldman Sachs & Co.
Brent Thill - Citigroup
Kash Rangan – Bank of America/Merrill Lynch
John DiFucci – JPMorgan
Peter Goldmacher - Cowen & Company

Presentation

Operator

Good day everyone and welcome to today''s Oracle Corporation quarterly conference call. Today''s conference is being recorded. At this time, I would like to introduce Mr. Roy Lobo, Head of Investor Relations at Oracle. Please go ahead, sir.

Roy Lobo

Thank you, operator. Good afternoon everyone and welcome to Oracle''s third quarter fiscal year 2009 earnings conference call. With me on the call are Oracle’s Chief Executive Officer, Larry Ellison; Oracle’s President, Safra Catz; Oracle''s President, Charles Phillips; and Oracle’s Executive Vice President and Chief Financial Officer, Jeff Epstein. We will begin with a few prepared remarks and then take questions from the audience.

Let me begin by reminding everyone that today''s discussions may include predictions, expectations, intentions, estimates, or other information that might be considered forward-looking. While these forward-looking statements represent our current judgment on what the future holds, they are subject to risks and uncertainties that may cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements which reflect our opinion only as of the date of this presentation. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision of these forward-looking statements in light of new information or future events. Throughout today''s discussion we will attempt to present some important factors relating to our business that may affect our predictions. You should also review our most recent Form 10-K and 10-Q for a complete discussion of these factors and other risks that may affect our future results or the market price of our stock.

A .PDF copy of our press release and the financial tables, which include a GAAP to non-GAAP reconciliation, can be viewed and downloaded on the Oracle Investor Relations website at www.oracle.com/investor. You can also access the supplemental financial tables on www.oracle.com/investor.

So with that I would like to turn the call over to Jeff Epstein for his opening comments.

Jeffrey E. Epstein

Thank you, Roy. Good afternoon everyone and thank you for joining us. I will review our non-GAAP financial results focusing on constant currency growth rates unless otherwise stated.

First, a note about foreign exchange rate movements. In December we told you that using then current exchange rates would reduce our Q3 growth rate by 8 percentage points compared to constant currency. During the third quarter the U.S. dollar strengthened again, further reducing our international revenues, expenses, and profits when measured in U.S. dollars. As a result, currency movements reduced new license revenues by 9%, total revenues by 10%, net income by 12%, and earnings per share by 13%, or $0.05 per share, compared to Q3 of last year.

Now, let’s review the income statement. In the third quarter our new software license revenues were $1.5 billion, up 3% in constant currency and down 6% in U.S. dollars. EMEA grew 12%, Asia grew 1%, and the Americas were down 4%.

Technology new license revenues were $1.1 billion, up 6% in constant currency and down 4% in U.S. dollars. EMEA grew 15%, Asia grew 1%, and the Americas were down 1%.

Our BEA products, which have now been technically integrated with Oracle''s Fusion Middleware, packaged into unified suites, and are sold off the same price list, accounted for $140 million of our Q3 new license revenues, based on our internal allocations which are consistent with previous quarters.

Applications new license revenues were $396 million, down 4% in constant currency and down 12% in U.S. dollars. EMEA grew 2%, Asia fell 2%, and the Americas were down 8%.