Oracle Earnings Slip as Revenue Rises 19%

Oracle Corp.’s fiscal second-quarter earnings slipped slightly but still met analysts’ expectations, a performance unlikely to satisfy investors who have been expecting bigger things since the business software maker launched a nearly $20-billion shopping spree a year ago.

The Redwood Shores, Calif.-based company said Thursday that it earned $798 million, or 15 cents a share, during the three months ended Nov. 30. That represented a 2% decrease from $815 million, or 16 cents, in the same period last year.

Revenue rose 19% to $3.29 billion. The difference largely reflects gains from several acquisitions that Oracle completed during the last year, most notably its $10.3-billion purchase of PeopleSoft Inc.

If not for accounting charges stemming mostly from the PeopleSoft purchase, Oracle would have earned 19 cents a share, matching the average estimate among analysts surveyed by Thomson Financial.

It marked the third straight quarter since the PeopleSoft acquisition that Oracle has met or surpassed analyst expectations. But the company tried to lower the bar for the current quarter ending in February, telling analysts in a conference call that it expected to earn 19 cents a share again, excluding acquisition costs. That’s a penny below analysts’ current average estimate, Thomson Financial said.

Oracle disclosed the results after the stock market closed. The company’s shares gained 2 cents to close at $12.83, then fell to $12.48 in after-hours trading.

After several years of relatively little growth in its core business of selling database software, Oracle has been building up its line of business applications software -- the coding that automates a wide range of administrative tasks.

Besides buying PeopleSoft, Oracle has made smaller acquisitions this year as it gears up to take over Siebel Systems Inc. in a $5.85-billion deal that is expected to close in early 2006.

But Oracle is worth less than before it started its shopping spree. The company’s market value has declined 6% this year.

“It’s a little early to tell how everything will work out, but they are under tremendous pressure to show they have been making wise investments,” said industry analyst Judy Sweeney of AMR Research.