Earnings Press Releases
Oracle Corporation Reports Record Third Quarter Fiscal 1998 Results, EPS $0.22
Americas Server License Revenue up 34%
REDWOOD SHORES, Calif., March 12, 1998 -- Oracle Corporation
(Nasdaq: ORCL) today reported results for the quarter ended February 28, 1998.
Revenues increased 27 percent (33 percent in local currencies) to
$1,749 million from $1,373 million in the same period last year. Net income
for the period was $215 million, or $0.22 per share, compared to net income of
$193 million, or $0.19 per share, in the same period of fiscal 1997 (excluding
the one-time $37 million charge related to the Datalogix acquisition).
For the first nine months of fiscal 1998, revenues increased 27 percent to
$4,731 million from $3,736 million in the same period last year. Net income
for the nine-month period was $552 million, or $0.55 per share, compared to
net income of $485 million, or $0.48 per share, excluding one-time charges
related to acquisitions in fiscal 1997 and fiscal 1998. Giving effect to the
charges, net income for the fiscal 1998 nine-month period was $411 million, or
$0.41 per share.
Worldwide license and other revenue growth of 14 percent (19 percent in
local currencies) for the third quarter over the same period last year, showed
a healthy rebound from the previous quarter, led by Oracle's server
performance in the Americas region, which was up 34 percent. Worldwide
services continued to reflect strong performance, reporting 41 percent growth
in the quarter versus the same period last year.
Americas and EMEA led performance by geography, when comparing third
quarter fiscal 1998 results with the comparable period in fiscal 1997.
Americas reported a strong growth rate of 44 percent in local currencies (up
43 percent in reported dollars) and EMEA reported revenue growth of 29 percent
in local currencies (up 21 percent in reported dollars). Asia Pacific grew
3 percent in local currencies (down 12 percent in reported dollars). Without
the impact of currency exchange, worldwide revenue growth would have been 33
percent.
During the quarter, InfoWorld selected Oracle8(TM) and Oracle(R)
Application Server as its 1997 Products of the Year for Best Database and
Server Software, respectively, in the magazine's 17th annual awards for the
year's most outstanding enterprise products. Oracle8 Enterprise Edition and
Oracle Application Server Advanced Version both received the highest possible
"Excellent" scores in separate InfoWorld Test Center reviews in 1997. Both
products from the world's leading supplier of software for information
management were praised for their superior strengths in manageability,
performance, scalability, transaction management and fault tolerance. Combined
together, the two products provide one of the industry's most integrated
solutions for network computing.
During the quarter, Oracle shipped the world's first suite of enterprise
business applications based on Java, Oracle Applications(TM) Release 10.7 NCA.
For the first time, corporations are able to implement enterprise applications
that have all the benefits of graphical, client/server software without the
cost and complexity of installing client software on each user's desktop.
Beyond realizing immediate and dramatic cost savings, by shifting the
complexity of administering software from the desktop to professionally
managed networks, companies can provide higher reliability and service levels
to their user communities.
"We are pleased with the significant progress we've made this quarter
proving the company's ability to focus and execute," said Ray Lane, Oracle's
president and chief operating officer. "Although we believe the situation in
Asia Pacific will continue to negatively effect results for sometime, Oracle's
performance in the Americas and EMEA shows that the primary issues surrounding
sales force reorganization are behind us. Particularly gratifying was the
healthy server growth in both the Americas and EMEA.
"We have also delivered in this quarter the Network Computing Architecture
in all of our products," Lane continued. "We are now able to deliver the
lowest cost of ownership to our customers."
Oracle Corporation is the world's leading supplier of software for
information management, and the world's second largest independent software
company. With annual revenues of over $6.7 billion, the company offers its
database, tools and application products, along with related consulting,
education, and support services, in more than 145 countries around the world.
For more information about Oracle, call Oracle Investor Relations at
650-506-4073. Oracle's World Wide Web address is (URL) http://www.oracle.com/.
"Safe Harbor" Statement Under the Private Securities Litigation Reform Act
1995:
Information in this release relating to Oracle's future prospects which
are "forward-looking statements" are subject to certain risks and
uncertainties that could cause actual results to differ materially, including,
but not necessarily limited to the following: (1) Management's ability to
manage growth, continuously hire and retain significant numbers of qualified
employees, forecast revenues and control expenses continues to be a challenge.
An unexpected decline in the growth rate of revenues without a corresponding
and timely slowdown in expense growth could have a material adverse effect on
results of operations. (2) The market for Oracle's products is intensely
competitive and is characterized by rapid technological advances and frequent
new product introductions. There can be no assurances that Oracle will
continue to introduce new products and new versions of existing products that
keep pace with technological developments, satisfy increasingly sophisticated
customer requirements and achieve market acceptance. (3) Intense competition
in the various markets in which Oracle competes may put pressure on Oracle to
reduce prices on certain products, particularly in the departmental database
marketplace. (4) Delays in product delivery or closing of sales can cause
quarterly revenues and income to fall significantly short of anticipated
levels. (5) Oracle is introducing new products, such as web applications
servers and network computing software; the market acceptance and contribution
to Oracle's revenues of these products cannot be assured. (6) A significant
amount of current demand for applications software may be generated by
customers in the process of replacing and upgrading applications in order to
accommodate the change in date to the year 2000. Once such customers have
completed such preparations, the software industry and Oracle may experience a
significant deceleration from the strong annual growth rates recently
experienced in the applications software marketplace. In addition, Oracle may
generally experience increased expenses in addressing issues associated with
the transition to software that is year 2000 compliant. Oracle undertakes no
obligation to update information contained in this release. For further
information regarding risks and uncertainties associated with Oracle's
business, please refer to the "Risk Factors" section of Oracle Corporation's
SEC filings, including, but not limited to, its annual report on Form 10-K and
quarterly reports on Form 10-Q, copies of which may be obtained by contacting
Oracle Corporation's Investor Relations Department at 650-506-4073 or Oracle's
Investor Relations website at http://www.oracle.com/.
NOTE: Oracle is a registered trademark of Oracle Corporation.
ORACLE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
($ in thousands, except per share data)
(unaudited)
3rd Quarter Ended Nine Months Ended
February February
1998 1997 1998 1997
---------------- ----------------
REVENUES
Licenses and other $ 774,521 $ 681,108 $1,950,529 $1,767,093
Services 974,236 691,504 2,780,784 1,969,212
--------- --------- --------- ---------
Total Revenues 1,748,757 1,372,612 4,731,313 3,736,305
--------- --------- --------- ---------
OPERATING EXPENSES
Sales and marketing 567,619 460,361 1,545,560 1,274,899
Cost of services 586,398 401,441 1,603,196 1,115,031
Research and development (a) 184,106 138,527 526,990 391,036
General and administrative 92,361 75,356 249,258 215,349
Acquired in-process
research and development (b) -- 36,800 167,054 36,800
--------- --------- --------- ---------
Total Operating Expenses 1,430,484 1,112,485 4,092,058 3,033,115
--------- --------- --------- ---------
OPERATING INCOME 318,273 260,127 639,255 703,190
Other income (expense) (b) 12,615 4,330 68,837 17,935
--------- --------- --------- ---------
INCOME BEFORE TAXES 330,888 264,457 708,092 721,125
Provision for income taxes 115,811 95,204 297,220 259,605
--------- --------- --------- ---------
NET INCOME $ 215,077 $ 169,253 $ 410,872 $ 461,520
--------- --------- --------- ---------
--------- --------- --------- ---------
EARNINGS PER SHARE (b)
Basic $ 0.22 $ 0.17 $ 0.42 $ 0.47
Diluted $ 0.22 $ 0.17 $ 0.41 $ 0.46
Shares Outstanding
Basic 974,947 985,155 978,907 985,557
Diluted 991,641 1,009,779 1,002,155 1,011,473
(a) In accordance with Statement of Financial Accounting Standards
No. 86, $12,526 and $5,533 were in the quarters ended February 28, 1998 and
1997, respectively. Amortization of capitalized software costs was $12,738
and $5,466 in the quarters ended February 28, 1998 and 1997, respectively.
(b) Acquired in-process research and development represents charges of
$91,500 and $75,554, respectively, for the Treasury Services Corporation and
Navio Communications, Inc. merger transactions that closed in August, 1997.
Excluding the effect of these transactions, which also included a credit of
$25,726 for minority interest in other income (expense), the provision for
income taxes would have been 35% and net income and diluted earnings per share
for the first nine months of fiscal 1998 would have been $552,200 and $0.55
per share, respectively. Acquired in-process research and development in Q3
of fiscal 1997 represents charges of $36,800 related to the acquisition of
Datalogix International, Inc.
ORACLE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands)
February 28, May 31,
1998 1997
---- ----
(unaudited)
ASSETS
Current Assets
Cash and short term investments $1,516,819 $1,213,190
Trade receivables, net 1,322,781 1,540,470
Prepaid and refundable income taxes 261,042 274,366
Other current assets 233,607 243,070
--------- ---------
Total Current Assets 3,334,249 3,271,096
--------- ---------
Long-term cash investments 82,752 116,337
Property and equipment, net 920,343 868,948
Computer software development costs, net 98,817 98,981
Other assets 313,595 268,953
--------- ---------
TOTAL ASSETS $4,749,756 $4,624,315
--------- ---------
--------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes payable, including current
maturities $ 13,407 $ 3,361
Accounts payable 202,558 185,444
Income taxes 89,935 203,646
Customer advances and unearned revenues 663,818 602,862
Other current liabilities 833,722 926,826
--------- ---------
Total Current Liabilities 1,803,440 1,922,139
--------- ---------
Long-term debt 304,500 300,836
Long-term liabilities 56,438 24,226
Deferred income taxes 8,344 7,402
Stockholders' equity 2,577,034 2,369,712
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $4,749,756 $4,624,315
--------- ---------
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Web site: http://www.oracle.com/ |
