Oracle Beats Street, but Profit Dips

(Updates stock price, adds comments from company)

Oracle(ORCL) beat analysts' revenue and earnings expectations in its fourth-quarter results, but saw its profit slip thanks to the impact of foreign currency.

The database giant posted revenue of $6.9 billion, down from $7.2 billion in the same period last year, but well above analysts' estimate of $6.47 billion.

The results, which were posted after the market closed Tuesday, provide hints as to the health of the software sector.

Oracle earned 38 cents a share on net income of $1.9 billion, down from 40 cents a share and net income of $2 billion in the fourth quarter of 2008. The company's most recent quarter, however, was flattened slightly by foreign currency pressures.

On a non-GAAP basis, Oracle earned 46 cents a share, down 1% from the prior year's quarter. Without the impact of foreign currency, Oracle would have earned 51 cents a share, comfortably beating analysts' estimate of 44 cents.

Despite an increasingly tough economy, Oracle grew its revenue from software license updates and support by 8% during the quarter, reaching $3.1 billion. New software license revenue, however, dropped 13% to $2.7 billion.

Oracle President Charles Phillips was nonetheless unable to resist taking a swipe at archrival SAP(SAP).

"We grew faster and took market share from SAP in every region around the world," he said in a statement, adding that Oracle grew its European applications business by 5%. "Historically Europe has been an SAP stronghold, but these results prove that we can compete and beat them everywhere."

"We're obviously pleased with our Q4 results," said Safra Catz, who shares the presidency with Phillips, during a conference call late Tuesday. "We delivered the highest operating margin in our history, passing the 50 percent mark for the first time."

Oracle, which recently announced plans to buy Sun Microsystems(JAVA) for $7.4 billion, posted revenue of $23.3 billion for fiscal 2009, a 4% hike on the prior year. Analysts had expected sales of $23.06 billion.

Oracle, which is boosting its presence in Software-as-a-Service, also fired a shot across the bows of its rival Salesforce.com(CRM) during the conference call. "We think we can be very competitive against Salesforce.com," said Oracle CEO Larry Ellison. "Every time we compete with them in large customers, we win."

For the first quarter of fiscal 2009, Oracle expects non-GAAP earnings between 31 and 33 cents a share in constant currency. The company also anticipates revenue 1% to 4% higher than the same period last year, when it reported sales of $5.3 billion.

The company's shares rose 35 cents, or 1.8%, to $20.22, in extended trading.

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