Oracle Quarterly Results in Line With Reduced Forecast
Oracle Corp., the world’s second-largest software maker, said Thursday that the weakening economy hit database and application software sales in the last quarter, and said the outlook remains difficult.
The Redwood Shores, Calif.-based company said its earnings rose to $583 million, or 10 cents a share, in its third quarter, from $503 million, or 8 cents a share, in the year-earlier quarter.
The results were in line with Oracle’s warning March 1, when it cut its forecast to 10 cents a share from the 12 cents analysts were expecting.
In a conference call with investors, Chief Executive Larry Ellison said the company will cut jobs as it looks to reduce spending because the weakening economy is hurting sales.
“One of the ways we control costs is by managing head count,” Ellison was quoted as saying by Bloomberg News. “With the exception of R&D;, Oracle should be constantly reducing head count in every area.”
He didn’t say how many jobs would be cut or when the reductions would be announced.
Oracle said it is too difficult to predict the outlook for its fourth quarter.
“If you asked me to guess right now, [total license revenue growth] would probably be zero, with flat earnings. No better. No worse, just holding our own,” Chief Financial Officer Jeffrey Henley told Reuters.
Quarterly revenue rose to $2.7 billion from $2.4 billion a year earlier as database revenue grew 6%, more than expected, and applications revenue grew 25%, less than the 50% the company forecast March 1.
The company had previously forecast 10% to 15% database growth and as much as 75% growth in applications software sales.
“Given that we were looking for applications to drive this business forward, this is pretty disappointing,” said Mark Verbeck, senior analyst at Epoch Partners in San Francisco.
After the announcement, Oracle shares hovered at $14.69 in after-hours trading, unchanged from their close in regular Nasdaq trading, setting a new 52-week low.
“The U.S. economic downturn over the past several months clearly affected our revenue and profit growth more than we anticipated, due to a sharp downturn in completed transactions in the last few days of the quarter,” Henley said in a statement accompanying Thursday’s results. “The current economic uncertainty continues to limit our visibility going forward.”
At a Glance
Other technology earnings, excluding one-time gains and charges unless noted:
* Publishing software maker Adobe Systems Inc. said fiscal first-quarter profit beat lowered analysts’ forecasts, but sales disappointed and Adobe lowered its second-quarter revenue target because of the uncertain economy.
Net income rose to $119 million, or 33 cents a share, compared with $89.5 million in the year-ago period, it said without giving a per-share comparison. Revenue rose 17% to $329 million. Analysts on average had estimated that the San Jose-based company would earn 28 cents a share on sales totaling $344.87 million.
