beat earnings expectations by a penny per share for its first fiscal quarter, but overall revenues from software sales were 9% lower than during the same period last year.
The company said it recorded net income of $511 million, or 9 cents per share on $2.2 billion in revenue. During the same period last year, the company reported earnings of 8 cents per share on $2.3 billion in revenue.
Analysts were expecting the company to report earnings of 8 cents per share on $2.2 billion in revenue, according to
Thomson Financial First Call
The company sold $731.4 million in software licenses, compared to $807.2 million during the same quarter last year. Operating margins increased to 33% from 29% during the same quarter last year.
The news is the first major corporate earnings announcement since terrorists attacked the United States on Tuesday. In an email to reporters, Oracle CEO Larry Ellison said the company decided to release its results despite closed U.S. stock markets to signal its resolve in the face of the attacks. Other firms, such as
, decided to postpone their earnings announcements. Oracle postponed its previously scheduled conference call to discuss its results until 5:30 p.m. EDT Monday.
"We feel it's very important to continue to move forward as a sign of our determination not to be bowed by despicable acts of terrorism and to that end we've released the numbers as planned," said Ellison in an email. "At the same time, we are fully cognizant of the fact that many, especially the investment professionals concentrated in New York, are currently dealing with the aftermath of Tuesday's tragic events, and we want to ensure that we do not unduly add to their burdens by scheduling the conference call."
The company said one of its employees was on one of the four hijacked flights which caused the worst destruction on American soil since Pearl Harbor. Six of its employees who were thought to be at New York's World Trade center during the attacks that toppled them have not been accounted for, and it has also not heard from a seventh employee thought to be in the area at the time.
Before Tuesday's attacks Oracle was expected to post lackluster results.
Sales of its software applications, or business software, have disappointed investors in recent quarters and many were expecting similar news today. Oracle did not break out numbers for its applications sales in its press release Tuesday, and a link to those numbers on its Web site wasn't immediately functioning.
Given those expectations, Oracle's results were a qualified positive.
"These results are good. They've made some good progress on the cost-cutting side and their services margins look like they increased significantly," says Jon Ekoniak, an analyst with U.S. Bancorp Piper Jaffray, who has a neutral rating on Oracle. "A lot of people were expecting the worst, and they essentially came in line with expectations overall." (His firm hasn't done underwriting for Oracle.)
Tuesday's attacks could impact the results of other software firms whose quarters end Sept. 30. Historically, software firms close the majority of their sales during the last month, and even the last weeks, of their quarters. Oracle's fiscal first quarter closed Aug. 31.
With Tuesday's attacks bringing business to a near halt this week, and the potential for muted business in the coming weeks as the nation comes to terms with them, September sales could be even slower than originally anticipated in the software sector.
"September's going to be very difficult," Ekoniak says. "There's definite uncertainty for Q3."