On Dec. 19, enterprise software behemoth Oracle (NASDAQ:ORCL) released second-quarter 2008 earnings for the period ending Nov. 30.

  • Sales of business applications outpaced databases and middleware all over the globe, but no single outstanding product category or geographic market fueled the growth this time.
  • Margins are inching upward as Oracle's economies of scale kick in.
  • When it comes to winning approval from our CAPS community, Oracle leads a closely contested business-software race. Is that fair? Weigh in today with your opinion of Oracle, its competitors, or any other company.

(Figures in millions, except per-share data)

Income Statement Highlights

Q2 2008

Q2 2007

Change

Sales

$5,313

$4,163

27.6%

Net Profit

$1,303

$967

34.7%

EPS

$0.25

$0.18

38.9%

Diluted Shares

5,232

5,287

(1.0%)

Get back to basics with the income statement.

Margin Checkup

Q2 2008

Q2 2007

Change*

Gross Margin

76.7%

75.4%

1.3

Operating Margin

33.5%

32.6%

0.9

Net Margin

24.5%

23.2%

1.3

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q2 2008

Q2 2007

Change

Cash + ST Invest.

$8,432

$7,825

7.8%

Accounts Rec.

$3,264

$2,543

28.4%

Liabilities

Q2 2008

Q2 2007

Change

Accounts Payable

$346

$284

21.8%

Long-Term Debt

$6,236

$5,735

8.7%

The balance sheet reflects the company's health.

Cash Flow Highlights

Q2 2008

Q2 2007

Change

Cash From Ops.

$602

$243

147.7%

Capital Expenditures

$69

$57

21.1%

Free Cash Flow

$533

$186

186.6%

Owner Earnings

$1,594

$1,178

35.3%

Free cash flow is a Fool's best friend.

Competitive Context

Market Cap

Trailing P/E Ratio

CAPS Rating

Microsoft (NASDAQ:MSFT)

$329,690

23.1

***

IBM (NYSE:IBM)

$149,330

16.0

***

Oracle

$113,890

26.2

****

SAP AG (NYSE:SAP)

$61,360

21.8

***

Sun Microsystems (NASDAQ:JAVA)

$15,690

27.7

***

Using the latest reported numbers from Capital IQ.

Keep your partners close and the competition in your vest pocket.

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