Arik Hesseldahl

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Oracle Beats the Street, Boosts Dividend

Oracle topped the estimates of analysts in its third quarter. Sales rose 37 percent to $8.8 billion, ahead of the $8.67 billion consensus that analysts had forecast. The surge was led by a 29 percent increase in new software license revenues, to $2.2 billion. Software license updates and product support revenue grew by 13 percent. Hardware revenues were $1 billion.

Per share earnings were 54 cents, beating the consensus of 50 cents. Net income was $2.1 billion.

Oracle also said it would boost its quarterly cash dividend to 6 cents per share, amounting to a 20 percent increase over the previous dividend of 5 cents.

In a statement, Oracle CEO Larry Ellison touted the strength of the combined hardware and software businesses. “In Q3 we signed several large hardware and software deals with some of the biggest names in cloud computing,” said Ellison. “For example,’s new multi-year contract enables them to continue building virtually all of their cloud services on top of the Oracle database and Oracle middleware. Oracle is the technology that powers the cloud.”

Operating margin was 44 percent on a non-GAAP basis, and the margin on hardware increased to 55 percent. President Safra Catz said in a company statement that Oracle is now “completely confident” the company will hit its previously stated goal of yielding a $1.5 billion fiscal year 2011 profit for the business it took over when it acquired Sun Microsystems.

Oracle shares rose by 7 cents to $32.25 in after hours trading.