ORACLE REPORTS Q3 GAAP EPS UP 3% TO 26 CENTS, NON-GAAP EPS UP 16% TO 35 CENTS
Declares First-Ever Quarterly Dividend of 5 Cents per Share of Common Stock
Redwood Shores, CA – March 18, 2009
Oracle Corporation (NASDAQ: ORCL) today announced fiscal 2009 Q3 GAAP earnings per share were $0.26, up 3% compared to last year. Third quarter GAAP total revenues were up 2% to $5.5 billion, while quarterly GAAP net income was down 1% to $1.3 billion. GAAP software revenues were up 5% to $4.4 billion with new software license revenues down 6% to $1.5 billion. GAAP software license updates and product support revenues were up 11% to $2.9 billion. GAAP services revenues were down 8% to $1.0 billion. GAAP operating income was up 4% to $1.9 billion and GAAP operating margin was up 54 basis points to 36%. GAAP operating cash flow on a trailing twelve month basis was $8.5 billion, up 17%.
Oracle’s Q3 results were impacted by the dramatically reduced value of foreign currencies when compared to US dollars, reducing GAAP earnings by $0.05 per share. If currency exchange rates were the same as they were in Q3 of last year, Oracle’s Q3 GAAP earnings per share would have been up 18% to $0.31 rather than up 3% to $0.26, with total GAAP revenues up 11% rather than up 2%, GAAP software revenues up 14% rather than up 5%, GAAP net income up 14% rather than down 1%, and GAAP operating income up 17% rather than up 4%.
Third quarter non-GAAP earnings per share were up 16% to $0.35, and non-GAAP net income was up 12% to $1.8 billion, compared to the same quarter last year. Non-GAAP total revenues were up 2% to $5.5 billion. Non-GAAP software revenues were up 5% to $4.5 billion and non-GAAP software license updates and product support revenues were up 12% to $3.0 billion. Non-GAAP operating income was up 15% to $2.6 billion and non-GAAP operating margin was up 510 basis points to 46%.
If currency exchange rates were the same as they were in Q3 of last year, Oracle’s non-GAAP earnings per share would have been up 29% to $0.40, rather than up 16% to $0.35, with total non-GAAP revenues up 12% rather than up 2%, non-GAAP software revenues up 14% rather than up 5%, non-GAAP net income up 24% rather than up 12% and non-GAAP operating income up 26% rather than up 15%.
Oracle also announced today that its Board of Directors intends to pay a quarterly cash dividend of $0.05 per share, or $0.20 per share annually, on its common stock. The Board declared the first cash dividend of $0.05 per share of outstanding common stock to be paid to shareholders of record as of the close of business on April 8, 2009, with a payment date of May 8, 2009. Future declaration of quarterly dividends and the establishment of future record and payment dates are subject to the final determination of Oracle’s Board of Directors.
“Our non-GAAP operating income was $2.6 billion in Q3, which was an increase of 15% over the same period last year, resulting in operating margins of 46%. In constant currency, non-GAAP operating income grew by 26%,” said Oracle Executive Vice President and CFO, Jeff Epstein. “In addition, Oracle generated $8.0 billion in free cash flow in the past twelve months, up 14% over the same period last year.”
“We are committed to delivering value to our stockholders through technology innovation, strategic acquisitions, stock repurchases, and now through a dividend,” said Safra Catz, Oracle’s President. “We generated $8.0 billion in free cash flow over the last twelve months and we are running our business at record operating margins. We have always been committed to rewarding our stockholders’ investments in Oracle and the Board has decided that it is the right time to declare a dividend for our stockholders.”
“If you look past the effect of exchange rates, our new software license revenues for this quarter were higher than our new software license revenues for Q3 of last year,” said Oracle President Charles Phillips. “Achieving constant currency growth in new software license sales in this very challenging economy shows that we continue to beat our competitors in both technology and applications.”
“But for the strengthening of the US dollar leading to unfavorable currency exchange rates, our non-GAAP earnings per share would have increased 29% in Q3,” said Oracle CEO, Larry Ellison. “This is a tremendous achievement in the face of the serious slowdown in the world economy.”
Oracle will hold a conference call and web broadcast today to discuss these results at 2:00 p.m. (PDT) / 5:00 p.m. (EDT). To access the live web broadcast of this event, please visit the Oracle Investor Relations website at http://www.oracle.com/investor. Please hold down your control key while pressing refresh to ensure that the web link is visible.
Supplemental Financial Tables
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"Safe Harbor" Statement: Statements in this press release and accompanying materials relating to the Board of Directors’ or Oracle's future plans, intentions and prospects are "forward-looking statements" and are subject to material risks and uncertainties. Many factors could affect our current plans, intentions and expectations and our actual results, and could cause actual results to differ materially. We presently consider the following to be among the important factors that could cause actual results to differ materially from expectations: (1) Economic, political and market conditions, including the recent global economic and financial crisis, could adversely affect our business, operating results or financial condition, including our revenue growth and profitability, through reductions in customer IT budgets and expenditures and through the general tightening of access to credit. (2) We may fail to achieve our financial forecasts due to such factors as delays or size reductions in transactions, fewer large transactions in a particular quarter, unanticipated fluctuations in currency exchange rates, delays in delivery of new products or releases or a decline in our renewal rates for software license updates and product support. (3) We cannot assure market acceptance of new products or services or new versions of existing or acquired products or services. (4) We have an active acquisition program and our acquisitions may not be successful, may involve unanticipated costs or other integration issues or may disrupt our existing operations. (5) Periodic changes to our pricing model and sales organization could temporarily disrupt operations and cause a decline or delay in sales. (6) Intense competitive forces demand rapid technological advances and frequent new product introductions and could require us to reduce prices or cause us to lose customers. A detailed discussion of these factors and other risks that affect our business is contained in our SEC filings, including our most recent reports on Form 10-K and Form 10-Q, particularly under the heading "Risk Factors." Copies of these filings are available online from the SEC or by contacting Oracle Corporation's Investor Relations Department at (650) 506-4073 or by clicking on SEC Filings on Oracle’s Investor Relations website at http://www.oracle.com/investor. All information set forth in this release is current as of March 18, 2009. Oracle undertakes no duty to update any statement in light of new information or future events.
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