On Monday, Dec. 18, software mammoth Oracle (NASDAQ:ORCL) released Q2 earnings for the period ended Nov. 30.

  • Sales and profits continue their rapid growth rates, mainly thanks to Oracle's acquisition spree. Last January, it closed the Siebel deal, and that company had $469 million of revenue and $89 million of net income in the closest comparable 2005 quarter. Back that out, and you have about 11% more-or-less-organic revenue growth, and 10% earnings growth.
  • With the fresh revenues, Oracle also absorbed Siebel's lower margins.
  • And of course, that hefty debt load matches the $5.8 billion price tag of Siebel nearly dollar for dollar, though the company certainly had other financing options at the time. After the acquisition, Oracle had $4.36 billion of new cash on its balance sheet.

(Figures in millions, except per-share data)


Income Statement Highlights

Q2 2007

Q2 2006

Change

Sales

$4,163.0

$3,292.0

26.5%

Net Profit

$967.0

$798.0

21.2%

EPS

$0.18

$0.15

20%

Diluted Shares

5,287.0

5,238.0

0.9%

ROE

25.4%

27.2%

(6.6%)



Get back to basics with a look at the income statement.


Margin Checkup

Q2 2007

Q2 2006

Change*

Gross Margin

75.38%

77.00%

(1.62)

Operating Margin

32.60%

33.90%

(1.30)

Net Margin

23.23%

24.24%

(1.01)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.


Balance Sheet Highlights

Assets

Q2 2007

Q2 2006

Change

Cash + ST Invest.

$7,825.0

$3,403.0

129.9%

Accounts Rec.

$2,543.0

$1,976.0

28.7%



Liabilities

Q2 2007

Q2 2006

Change

Accounts Payable

$284.0

$240.0

18.3%

Long-Term Debt

$5,735.0

$156.0

3576.3%



Learn the ways of the balance sheet.


Cash Flow Highlights

Q2 2007

Q2 2006

Change

Cash From Ops.

$1,866.0

$298.0

526.2%

Capital Expenditures

$106.0

$34.0

211.8%

Free Cash Flow

$1,760.0

$264.0

566.7%

Owner Earnings

$1,129.0

$871.0

29.6%




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At the time of publication, Fool contributor Anders Bylund had no position in any company mentioned. Fool rules are here .