Oracle posts strong profit

SAN FRANCISCO: Oracle Corp. on Wednesday posted a stronger-than-expected quarterly profit, boosted by the acquisition of rival software maker PeopleSoft, and gave a bullish outlook, sending its shares up almost 6 percent.

Larry Ellison, chief executive of Oracle, the world's second biggest software maker, said customers were spending as global economies grew.

"We think what's contributing to Oracle's success is not simply increases in (technology) budgets, but that Oracle is getting a larger percentage of the budget," Ellison told Reuters Television in an interview.

Ellison said that although the rise of oil prices to $60 a barrel will have some impact on the economy, key markets remain strong. "I can't emphasize this enough, the North American economy is extremely strong and so is Asia. The United Kingdom is strong," he said.

Oracle's net income rose 3 percent to $1.02 billion, or 20 cents per share, for the fiscal fourth quarter ended May 31, from $990 million, or 19 cents a share, a year earlier.

Excluding one-time items, earnings were 26 cents per share, beating the average analyst estimate by 3 cents, according to Reuters Estimates.

Quarterly revenue rose to $3.88 billion -- in line with analysts' expectations -- from $3.08 billion a year ago.

Oracle forecast fiscal 2006 revenue above Wall Street estimates, and also said that earnings for the year and the first quarter could top estimates.

Oracle co-President Safra Catz said the company had smoothly completed integrating PeopleSoft, following a $10.6 billion acquisition aimed at boosting the performance of Oracle's business applications software, which automates business processes like payroll and demand forecasting.

Oracle said fourth-quarter results were buoyed by strength in sales of its flagship database products and better-than-expected sales of applications software.

Analysts took the report as an indication that customers would upgrade to newer versions of Oracle database products and that the PeopleSoft acquisition is producing results.

"We believe the PeopleSoft acquisition significantly increases the possibility of an applications turnaround story," said investment bank CIBC, which maintained its "sector outperformer" rating on Oracle, in a research note.