Strong Q4 Says More about Oracle than the Economy

With oil prices soaring and the Fed adding inflation to its mounting list of economic worries, all tech eyes were on Oracle Corp. The Redwood shores software giant reported fourth quarter earnings and was touted as no less than the barometer for how corporate IT spending was faring. According to said barometer, things are pretty good.

Oracle reported revenues of $7.24 b per share, up from $5.83 billion last year, beating analyst estimates of $6.82 billion. Excluding certain items, net income was 47 cents a share, beating expectations by two cents. In after-hours trading, Oracle shares rose 1.3% to $22.84.

This was Oracle's fiscal fourth quarter and it's always a strong one for the database maker that has increasingly gobbled share in applications and middleware through a torrent of software acquisitions. Even with high expectations baked in, the stock was ticked up in after hours. 

Oracle's third quarter was a disappointment for investors prompting many industry watchers to worry that the economic downturn might be hitting tech harder than expected. But now, that all is right in Larry Ellison's world, it doesn't mean the Valley is unscathed. Oracle is in a unique position: It's recent BEA Systems acquisition gives both revenues and profits a boost, as most of that ongoing maintenance revenue from BEA's customers pretty much just falls to Oracle's bottom line.

It even seems to help organic growth-to the degree Oracle breaks it out-because every acquisition gives Oracle a more secure position as the software vendor of choice inside large companies. With it's no. 1 position in database, no. 2 position in middleware and no. 2 position in applications, Oracle isn't a monopolist-but it's hardly a company a CIO can ignore either.

Add it up and Oracle's win may not mean as much for tech broadly as bulls would like to hope.