Oracle/Sun Microsystems Manages To Lower 2013 2Q Hardware Losses; Projects Growth in 2014

February 2014

Oracle/Sun Microsystems Manages To Lower 2Q Hardware Losses; Projects Growth In 3Q

Ever since Oracle Corporation (NYSE:ORCL) acquired Sun Microsystems in 2010 for $5.4 billion, the tag team of Larry Ellison (CEO) and Mark Hurd (President) has been struggling to make its hardware portfolio profitable. The second quarter results announced by the company on December 18 indicate that Mark Hurd’s efforts over the past two years in retooling Oracle’s fabled sales force to sell more hardware by linking mandatory sale of Exa boxes to their sales commission plans and redrawing sales quotas have finally started to yield results.

Better Than Expected 2Q

For the second quarter operations which ended on November 30, Oracle/Sun Microsystems reported that overall revenue from the two divisions of hardware remained flat at $1.3 billion. Hardware system products group revenue dropped 3 percent (lesser than expected) for the quarter to $714 million. In spite of the flat growth, the results from the hardware business are commendable since, analysts had feared that the company’s would be reporting net revenue losses of close to 11 percent for the hardware business this quarter.

SPARC SuperCluster and Big Data Appliance Record Triple Digit Growth

Indicating his bullishness about the coming quarters with respect to turn around in its hardware business, Oracle/Sun Microsystems President was quotes as saying, “Our hardware business, including support, grew 2% in constant currency this quarter driven by double-digit revenue growth in Exadata, Exalogic and Exalytics.  The SPARC SuperCluster and Big Data Appliance were even better, with triple-digit growth and we expect hardware products will show growth next quarter.”

Over all, the world’s second largest software vendor had a good quarter with its earnings per share of $0.56 growing by 5 percent in comparison to same quarter last year and generating net cash flow of $15.2 billion which for the trailing 12 months.