On Sept. 20, business-software titan Oracle (NASDAQ:ORCL) released first-quarter 2008 earnings for the period ended Aug. 31.

  • The Oracle train keeps chugging along, with revenue and earnings growth percentages in the mid-20s. This is the 13th quarter in a row that Oracle has met its publicly stated goal of 20% or better EPS growth every quarter.
  • New database and middleware licenses clocked in 23% higher than last year, the strongest sales growth performance in seven years for the company's bread-and-butter division.
  • You knew the numbers would be good, but would the smack-talk campaign continue? Yep. Between the earnings release and the conference call, Oracle's management got in not-so-subtle digs on nearly every major competitor, including IBM (NYSE:IBM), Microsoft (NASDAQ:MSFT), SAP AG (NYSE:SAP), and BEA Systems (NASDAQ:BEAS).
  • The nastiest barb? "Sybase (NYSE:SY) gets smaller every year" was pretty good in my book.

(Figures in millions, except per-share data.)

Income Statement Highlights

Q1 2008

Q1 2007

Change

Sales

$4,529

$3,591

26.1%

Net Profit

$840

$670

25.4%

EPS

$0.16

$0.13

23.1%

Diluted Shares

5,217

5,307

(1.7%)

Get back to basics with the income statement.

Margin Checkup

Q1 2008

Q1 2007

Change*

Gross Margin

74.4%

72.7%

1.7

Operating Margin

26.9%

26.3%

0.6

Net Margin

18.6%

18.7%

(0.1)
*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q1 2008

Q1 2007

Change

Cash + ST Invest.

$7,743

$8,298

(6.7%)

Accounts Rec.

$2,735

$2,118

29.1%

Liabilities

Q1 2008

Q1 2007

Change

Accounts Payable

$298

$223

33.6%

Long-Term Debt

$6,236

$5,737

8.7%

The balance sheet reflects the company's health.

Cash Flow Highlights

Q1 2008

Q1 2007

Change

Cash From Ops.

$2,701

$1,623

66.4%

Capital Expenditures

$87

$49

77.6%

Free Cash Flow

$2,614

$1,574

66.1%

Owner Earnings

$1,105

$878

25.9%

Free cash flow is a Fool's best friend.

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