Oracle Corporation today reported a 16 per cent rise in quarterly net income as the world's second largest software company benefited from steady demand for its flagship database software.
Net income in the fiscal first-quarter rose to $509 million, or 10 cents a share, from $440 million, or 8 cents a share, a year earlier.
Total revenue for the quarter ended August 31st rose 7 per cent to $2.22 billion, from $2.07 billion a year earlier.
Shares of Oracle, which last week won a court ruling allowing it to proceed with its hostile takeover offer for PeopleSoft Incorporation, rose to $11.05 in after-hours trade on the INET system after closing at $10.55 on the Nasdaq.
Oracle Chief Executive Mr Larry Ellison said in a statement the database business, which has comprised about 80 per cent of total license revenue in recent quarters, continued to post strong growth, with average growth of about 17 per cent in the past three quarters.
Mr Harry You, Oracle's chief financial officer, told reporters in a conference call that deals in its business software applications business, which has comprised about 20 per cent of total license revenue, "were taking longer" to close.
Analysts have cited concerns about the company's ability to grow its applications segment.
Oracle said new high-margin software license sales grew seven per cent in the quarter to $563 million. Oracle had forecast software license revenue in the quarter to rise by five per cent to 15 per cent.
License revenue is a key barometer of future maintenance revenue to which analysts have attached increasing importance as a recurring source of sales. Maintenance revenue includes items such as upgrades to existing software products.
Oracle shares have gained about seven percent since last Thursday when a federal judge ruled on the PeopleSoft bid. The stock, however, is down about 20 per cent on the year.
The ruling on Oracle's $7.7 billion hostile bid for PeopleSoft deal could be appealed by the US Justice Department. Any deal also would require approval from European Union antitrust regulators.