Oracle Corp.'s (ORCL) fiscal fourth-quarter profit climbed 25% as the business-software giant benefited from new revenue from its Sun Microsystems acquisition, as well as strong demand for software licenses.

President Safra Catz said in a statement that Sun contributed more than $400 million in operating profit during the quarter, and should "meet or exceed" the company's goals for fiscal 2011 and 2012.

"It was a good quarter," said David A. Stepherson, a portfolio manager at Hardesty Capital Management. "They beat the top line, they beat the bottom line, and the news is good about the Sun merger."

Shares rose 4.2% to $23.15 in after-hours trading on the strong results, boosted in part by January's $7.4 billion acquisition of Sun. New hardware systems revenue added $1.83 billion to the results, and made up 19% of the company's total revenue.

Meanwhile, Oracle continued to take "large chunks of market share" from rival SAP AG (SAP, SAP.XE), claimed Charles Phillips, co-president of the company.

There may be renewed competition from SAP, however, with the company's planned acquisition of database-maker Sybase Inc. (SY). "It may put some pricing pressure on them," said Laxmi Poruri, senior analyst at Primary Global Research.

Earlier this month, Oracle said it would make additional job cuts at Sun in Europe and Asia, resulting in total restructuring costs that will likely top $1 billion and far exceed earlier estimates. Fitch Ratings last month warned that the company's credit quality depended largely on the success of its integration of Sun, although the ratings agency did tout Oracle's ample liquidity, strong customer trends and established track record of integrating software acquisitions.

For the quarter ended May 31, Oracle posted a profit of $2.36 billion, or 46 cents a share, up from $1.89 billion, or 38 cents a share, a year earlier. Excluding stock-compensation, restructuring and acquisition-related costs, earnings jumped to 60 cents from 46 cents.

Revenue grew 39% to $9.51 billion. Roughly half of the company's revenue comes from markets outside the U.S.

In March, the company projected earnings of 52 cents to 56 cents a share on a 35% to 40% jump in revenue, assuming exchanges rates at that time.

New license revenue, a key measure of software growth, increased 14% and was up 15% excluding currency changes.

Operating margin narrowed to 34.7% from 42% as hardware is generally a lower-margin business.

Software revenue grew 13% and the much-smaller services segment had a 4% increase.

"It surprised me how the company continues to beat expectations on the margin side," said Stepherson. "The stock is way undervalued."

-By Jeanette Borzo, Dow Jones Newswires; 415-765-8230; jeanette.borzo@dowjones.com

(John Kell contributed to this article.)
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