Oracle Corporation (ORCL), a provider of hardware and software for cloud and data centers, has reported a marginal drop of a 0.32 percent in profit for the quarter ended Aug. 31, 2014. The company earned $2,184 million or $0.48 a share in the compared with $2,191 million or $0.47 a share a year ago. Non-GAAP earnings per share came in at $0.62.

Revenue during the first-quarter went up marginally 2.68 percent to $8,596 million from $8,372 million in the last year period.

Gross margin expanded by 84 basis points over the last year period to 88.80 percent. Total expenses as a percentage of revenues decreased to 76.73 percent from 77.72 percent in the same period last year. That has resulted in improvement of 15 basis points in operating margins to 34.47 percent. Operating income for the quarter stood $2,963 million compared with $2,873 million in the previous year period.

''We are increasing our cloud services growth rate while simultaneously delivering record levels of cash flow,'' said Oracle CEO, Safra Catz. ''In Q1, our overall cloud services business grew more than 30% to $475 million in revenue. At the same time, we delivered an all-time record operating cash flow up 7% to $6.7 billion. We are laser focused on two goals: growing our cloud business and growing our cash flow. We're off to a good start in FY15.''

''Our internally developed Fusion cloud applications business grew at a rate of nearly 200% in the quarter,'' said Oracle CEO, Mark Hurd. ''As our hyper-growth Fusion applications become a larger and larger portion of our total SaaS sales, that will drive up our overall cloud services growth rate. Our cloud business is already three times the size of Workday, but we won't be satisfied until we're number one in the cloud.''

'Next week at Oracle Open World, we will be rolling out our database cloud service,' said Oracle executive chairman and chief technology officer, Larry Ellison. 'Database is our largest software business, and database will be our largest cloud service. With our new multitenant Database as a Service offering, our customers and ISV's can move any of their existing Oracle databases and applications to the Oracle Cloud with the push of a button.'

The Board of Directors has declared a quarterly cash dividend of $0.12 a share of outstanding common stock. The Board also authorized the repurchase of up to an additional $13 billion of common stock under its existing share repurchase program in future quarters.

Cash Flow

Oracle Corp has generated cash of $6,728 million from operating activities during the quarter, up 6.93 percent or $436 million when compared with the last year period. The company has generated 90.54 cents of operating cash flow in every sales dollar for the quarter, up from 88.48 cents in the same period last year.

The company has spent $6,700 million cash to meet investing activities during the quarter, as against cash outgo of $3,501 million in the last year period. It has made net capital expenditure of $201 million during the quarter, which was higher by 31.37 percent or $48 million, from a year ago.

The company's free cash flow accounted for 97.01 percent of operating cash flow for the quarter, compared with 97.57 percent in the last year period.

The company has generated cash of $6,520 million from financing activities during the quarter, up 178.51 percent or $4,179 million, when compared with the last year period. It has borrowed net of $8,445 million through debt during the quarter. It has spent net of $1,412 million on repurchase of common stocks.

The company's cash dividend payment decreased 3.09 percent or $18 million to $564 million.

As on Aug. 31, 2014, the company's cash balance stood at $24,179 million, up 22.96 percent or $4,515 million from Aug. 31, 2013.

Working Capital

Oracle Corp has witnessed an increase in the working capital over the last one year. The company's working capital stood at $44,817 million as at Aug. 31, 2014, up $13,886 million or 44.89 percent from $30,931 million on Aug. 31, 2013. It registered an increase in current ratio to 4.35 as at Aug. 31, 2014 from 3.13 on Aug. 31, 2013.

The company's cash conversion cycle (CCC) was increased to 31 days for first quarter from 25 days for the last year period. CCC is a liquidity metric which expresses the length of time (in days) that a company uses to sell inventory, collect receivables and pay its accounts payable. Decreasing or steady CCCs are good for business.

Days' sales outstanding were almost stable at 19 days for first quarter when compared with the last year period.

The company's days' inventory outstanding decreased to 9 days for first quarter compared with 11 days for the last year period. This suggests the company took less time to convert the inventory into sales.

The company's days' payable outstanding went up to 20 days for first quarter compared with 17 days for the last year period. This reflects that the company has made late payment to vendors compared to prior year period.

Debt Position

Oracle Corp has witnessed an increase in long-term debt over the last one year. As on Aug. 31, 2014, long-term debt stood at $32,567 million, up 44.26 percent or $9,992 million, from Aug. 31, 2013. The company's total debt was 32.66 percent of total assets as on Aug. 31, 2014, compared with 27.90 percent on Aug. 31, 2013. It has witnessed an increase in debt to equity ratio to 0.68 on Aug. 31, 2014 compared with 0.55 on Aug. 31, 2013.

Interest coverage ratio, which determines how easily a company can pay interest expenses on outstanding debt, has declined to 11.35 from 13.24 in the same period last year.

Shares of the company gained $0.41 or 1 percent to settle at $41.55 on Thursday.