Business software giant Oracle (ORCL) reported strong fiscal year 2012 fourth-quarter results Monday afternoon. Non-GAAP earnings per share came in at $0.82 versus the $0.78 the Street was expecting. Revenues were roughly in-line with estimates, growing 1% on both a GAAP and non-GAAP basis to $10.92 billion and $10.95 billion, respectively. New software license revenues grew 7% on both a GAAP and non-GAAP basis, though hardware systems products revenue fell 16%. However, the company did achieve a strong non-GAAP operating margin of 50%.
Oracle also generated $13.1 billion in free cash flow during its fiscal year, bringing its cash hoard to nearly $31 billion. As a result, the company announced a $10 billion share buyback program. Further, CEO Larry Ellison now has over $30 billion in his war-chest to pursue strategic acquisitions. Ellison also noted that Oracle is now the number two cloud company in the world.
Including the negative impact of currency, the firm guided to revenue growth of –2% to 1% in its 2013 first quarter and earnings of $0.51-$0.55 per share, in-line with the Street consensus of $0.53. The firm also expects year-over-year growth in hardware, after seeing revenue from the hardware segment contract 16% in the most recently-reported quarter. Overall, we like the firm more than cloud competitor Salesforce.com (CRM), and we think it has some upside at its current price. The company continues to generate robust free cash flow, and we think it will converge to our fair value estimate of $38 per share over time. However, we prefer other tech giants like Apple () and Microsoft () in our actively-managed portfolios.