Oracle shares tanked in the aftermath of the results, released after market close on Thursday. Investors reacted negatively to the decrease in hardware systems revenue, which dipped 6% to $1.2 billion. Oracle’s overall revenue, however, climbed 12% to $10.8 billion.

“[The hardware number] spooks investors, but I believe they’re reaching the wrong conclusion,” said Richard Davis, an analyst at Canaccord Genuity, in an email to TheStreet.

“We do not want to overreact to trends in a business representing 10% of Oracle’s revenue mix,” added Karl Keirstead, an analyst at BMO Capital Markets, in a note released Friday. “The other 90% of Oracle is performing well.”

Closer inspection also revealed some positive numbers within Oracle’s hardware business, which relies heavily on technology acquired last year from Sun Microsystems. For one thing, Oracle pushed its hardware gross margin up to 56% from 46% in the prior year’s quarter.

Oracle CFO Safra Catz explained on Thursday’s conference call that the company runs the former Sun business on a much more profit-focused model. Compared to the fourth-quarter of last year, she said, Oracle has made a big move away from selling products at a loss or reselling other companies’ products, like storage gear from Hitachi.

While this clearly impacted fourth-quarter hardware revenue, Oracle’s endgame is to boost profits by placing technology acquired from Sun — as opposed to third parties — at the heart of its strategy. “Later this year, I expect the growth of the Sun hardware products to become quite obvious,” said Catz.

The tech giant also lauded the performance of its Exadata database system, which was once based on HP(HPQ) gear but its now running via Sun. Oracle president Mark Hurd explained that there are more than now more than 1,000 Exadata devices installed around the world. The company’s goal is to triple that number during fiscal 2012, he said.

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