Sun finally shines under Oracle | FT Tech Hub | FTtechhub - Industry analysis – FT.com

Another perspective on Oracle’s latest quarterly results

In its last full year as an independent company, Sun Microsystems suffered an operating loss of $775m. Now, less than two years later, Oracle says it’s well on the way to making a $1.5bn profit from the same businesses.

So did Sun shareholders make a big mistake in selling out too soon, or has Oracle really pulled off an overhaul in record time?

A bit of both, to judge from Oracle’s latest earnings.

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There’s some way to go. Due to the profit dilution from hardware (which only accounts for a fifth of its revenues), Oracle’s pro-forma operating margin has dropped to 44 per cent, from 49 per cent in the quarter before the Sun deal. If Oracle’s management really can claw their way back, it will provide strong evidence that the company’s amazing takeover machine is still firing on all cylinders.

Sun finally shines under Oracle | FT Tech Hub | FTtechhub - Industry analysis – FT.com