Oracle Corp will report lower fiscal fourth-quarter profit tomorrow, and sales of software licenses may lag the biggest database maker's forecast because competition has eroded prices, analysts said.
The second-largest independent software maker probably met the US$0.14 per-share average earnings estimate in a poll by First Call/Thomson Financial as it reduced costs, analysts said. Oracle had profit of 15 cents on sales of US$3.37 billion in the year-earlier period ending in May.
Oracle shares have tumbled 68 percent from a high in September amid slowing demand for its database software and Web-friendly suite of applications, which automate business tasks. The dotcom bust has hurt Oracle, whose databases were popular with startups, and some companies have opted for cheaper database software from rivals International Business Machines Corp and Microsoft Corp as the economy has slowed.
"The environment was as tough this quarter as it was last quarter," said Jon Ekoniak, an analyst at US Bancorp Piper Jaffray who has a "neutral" rating on Oracle. "License revenue overall will come in pretty weak."
License revenue refers to sales of new software programs. The company usually gets more than half its revenue from software sales, with the rest coming from services to support those programs.
Chief Financial Officer Jeff Henley said at the end of the third quarter that he expected fourth-quarter license sales and earnings to be little changed from US$1.84 billion and US$0.15 last year, though he cautioned that it was "a guess at best." Oracle shares rose US$0.15 to US$15 on Friday.
Investors are closely watching Oracle's results for clues as to how the industry has fared since the last quarter, when many companies, including Oracle, missed estimates. The company's earnings will offer a preview for the business-software market.
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