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Oracle Shrugs Off Spending Woes, Beats Street (Update1)

Updated from 4:51 p.m. ET to add Oracle's guidance and updated share price information along with conference call comments from Larry Ellison and Mark Hurd.

REDWOOD SHORES, Calif. (TheStreet) -- Oracle (ORCL) deftly sidestepped weakness in the global economy to post solid first-quarter results after market close on Tuesday.

The database maker brought in revenue of $8.43 billion and earnings of 48 cents a share, up from $7.5 billion and 42 cents a share in the prior year's quarter. Analysts surveyed by Thomson Reuters were looking for sales of $8.35 billion and earnings of 46 cents a share.

Oracle posted its first-quarter numbers after market close on Tuesday.

Tech investors were closely monitoring Oracle's numbers ahead of a busy earnings season. New software licenses, a key metric for Oracle's health, came in at the high end of the company's range, mirroring arch-rival IBM's (IBM) recent strong software performance.

Oracle saw its new software license sales grow 17% during the first quarter, a figure which delighted the company's management. "This strong organic growth coupled with disciplined business management enabled yet another increase in our operating margin in Q1," explained Oracle CFO Safra Catz in a statement released after market close. The company's operating cash flow was $5.4 billion, up from $3.8 billion in the same period of last year, she added.

The tech giant also enjoyed solid double-digit revenue growth in its high-end server family, which comprises Exadata, Exalogic, and SPARC M-Series products. In contrast, low-end server revenue declined, according to Oracle president Mark Hurd. "By moving away from low-margin commodity hardware and focusing on high-end servers, we increased our hardware gross margins from 48% to 54%," he noted.

For the coming quarter, Oracle expects revenue between $9.03 billion and $9.374 billion and earnings between 56 cents a share and 58 cents a share. New software license growth is expected to come in between 6% and 16%, according to CFO Safra Catz, who delivered the figures during a conference call after market close. Analysts surveyed by Thomson Reuters are currently looking for sales of $9.36 billion and earnings of 56 cents a share.

Even in an uncertain European economy, Oracle is enjoying strong demand on the other side of the Atlantic, according to Hurd. "I felt that we had just a solid quarter in Europe," he said, during the conference call. "We're hiring in Europe right now, we're adding to our sales team - we think there's more market to cover."

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