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Shares of Oracle (Nasdaq: ORCL ) are trading more than 3% higher today after reporting better than expected third-quarter results last night. Revenue soared 37% to $8.76 billion. Non-GAAP profits improved to $0.54 a share. Analysts were expecting $8.67 billion and $0.50 a share, respectively.
Sun helped drive the gains. The company's $7.4 billion purchase of the one-time server superstar has helped Oracle to create a thriving hardware business. Revenue related to sales of its Exadata database appliance and Exalogic cloud-computing appliance more than tripled year-over year. Overall, hardware accounted for 19% of Q3 revenue.
The strong performance elicited the usual jabs from management. Company co-president Safra Catz said during last night's earnings call that if Oracle paid the same sort of multiple for Sun that Hewlett-Packard (NYSE: HPQ ) paid for 3PAR, it would've cost close to $140 billion. "Don't worry, we wouldn't do that," Catz needled.
She's right; Oracle doesn't need that sort of purchase. With revenue and profit both up more than 35% over the past year, the database king is growing faster than IBM (NYSE: IBM ) , HP, and SAP (NYSE: SAP ) . Of the megacap techies, only Apple (Nasdaq: AAPL ) is growing faster.
But is Apple the better deal? Maybe, but the gap is narrowing. A 20% increase in the company's quarterly dividend payment, to $0.06 a share, makes this the rare tech stock that offers both massive earnings growth and outrageous dividend growth. Oracle could very well be the best tech stock to buy now.
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