Oracle Q4 numbers pleasantly surprise market watchers

Vendor hits market with early release of year-end financials, showing nice boost in new licence revenue

Oracle has pleasantly surprised Wall Street with a set of Q4 results showing healthy rises in operating income and software licence sales.

The vendor has published its results several days early to mitigate the impact of stories concerning the rumoured imminent departure of North American sales head Keith Block. The 26-year Oracle veteran has reportedly blasted other senior management figures and criticised the firm's acquisition of Oracle in leaked internal memos.

Block's departure was thought by some to be a portent of weak Q4 numbers, but GAAP revenue for the three months to the end of May rose one per cent annually to $10.9bn (£7bn). Operating profit was up five per cent to $4.6bn, equating to 42 per cent of sales, compared with 40 per cent in the corresponding period last year.

Quarterly sales of new software licences spiked seven per cent to almost $4bn, while update and support revenue grew five per cent to $4.15bn.

Hardware sales continue to be a challenge, with tin sales down 16 per cent year on year to less than $1bn, with product support revenue dropping 11 per cent to $600m.

For the full year, Oracle's turnover rose four per cent to $37.1bn, while operating profit was up 14 per cent to $13.7bn. This equates to a rise in operating margins from 34 per cent in FY11 to 37 per cent this time around.

The vendor's chief executive Larry Ellison (pictured) claimed his firm's burgeoning cloud business, in conjunction with its hardware operations, would be the bedrock of more growth in the coming year.

"The development of Oracle Cloud is strategic to increasing the size and profitability of Oracle's software business," he said. "Our Oracle Cloud SaaS business is nearly at a billion-dollar revenue run rate, the same size as our engineered systems hardware business. The combination of engineered systems and the Oracle Cloud will drive Oracle's growth in FY 2013."