Oracle Profit In Line, but Sales Miss

Database specialist Oracle grows earnings as sales slip.
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REDWOOD SHORES, Calif. (

TheStreet

) -- Software maker

Oracle

(ORCL) - Get Report

met analysts' profit forecast in its first-quarter results, despite seeing sales dip 5% year over year.

Excluding items, Oracle earned 30 cents a share, up 3% on the same period last year, and in line with analysts surveyed by Thomson Reuters.

However, the firsm posted revenue of $5.05 billion, down 5% from $5.33 billion in the same period last year and just below analysts' estimate of $5.25 billion.

"By substantially improving operating margins we were able to increase Q1 earnings per share even though revenues decreased slightly," said Safra Catz, Oracle's president, in a statement. "We grew non-GAAP operating margins by 570 basis points to 46 percent in our seasonally smallest quarter. Our operating model continues to drive earnings for our stockholders."

On a GAAP basis, Oracle earned 22 cents a share on net income of $1.1 billion, compared to 21 cents a share and net income of $1.07 billion in the year-ago quarter.

The company's results were nonetheless impacted by foreign currency, which reduced its GAAP earnings by 2 cents a share.

Oracle, which competes with

IBM

(IBM) - Get Report

,

Microsoft

(MSFT) - Get Report

and

SAP

(SAP) - Get Report

, also declared a cash dividend of 5 cents a share, to be paid Nov. 4 2009.

Looking ahead, excluding items, Oracle expects earnings between 35 cents a share and 36 cents a share, up from 34 cents in the same period last year. Analysts had predicted second-quarter earnings of 36 cents a share.

Oracle's $7.4 billion acquisition of

Sun Microsystems

(JAVA)

, which has been delayed by a European Commission anti-trust probe, was briefly discussed during a conference call after market close.

Catz said that she has no additonal information on when the deal is likely to close. She explained, however, that Oracle is confident that Sun will add $1.5 billion to its operating income when the deal is closed.

Investors responded negatively to Oracle's results, and the firm's shares slipped 88 cents, or 3.98%, to $21.25 in extended trading Wednesday.