Print

Mail

wiki links

Oracle's earnings fall 33% as sales of software drop

Oracle Corp, the world's third-biggest software maker, said first-quarter earnings fell 33 percent and sales dropped more than forecast amid a slump in corporate spending that's lasted a year and a half.

Net income fell to US$342.7 million, or 6 cents a share, from US$510.6 million, or 9 cents, a year earlier. Sales in the period ended Aug. 31 declined 10 percent to US$2.03 billion. The company is cutting as many as 1,200 jobs to cope with the slowdown, Chief Financial Officer Jeff Henley said on a conference call.

Oracle shares slipped as much as 7.3 percent on the news.

Chief Executive Larry Ellison has been trying to wean the database-software maker from its dependence on multimillion-dollar transactions, which have grown scarce as corporations try to preserve profits. Oracle's sales have dropped for the past six quarters and will miss forecasts this quarter, Henley said.

"It's tough to get a sign-off on some of the larger deals," said Alex Vallecillo, who helps manage Armada Funds' US$18 billion in assets, including 76,600 Oracle shares.

"They're not able to break away from the environment." Analysts polled by Thomson First Call expected revenue of US$2.06 billion in the first quarter. Second-quarter sales will fall 4 percent to 7 percent from the year-earlier period, Henley said.

That's a range of US$2.21 billion to US$2.29 billion, less than the US$2.31 billion average estimate of analysts polled by First Call.

Oracle shares fell as low as US$8.37 after the report. They lost 25 cents to US$9.03 as of 4pm New York time in Nasdaq Stock Market trading. The stock has declined 35 percent this year.

The company cut 600 jobs in the first quarter, or 1.4 percent of its work force, and will eliminate 500 to 600 more jobs this quarter, Henley said. Oracle had 41,500 workers as of August.

The Redwood City, California-based company trails Microsoft Corp. and International Business Machines Corp in software sales.

In last year's first quarter, Oracle had sales of US$2.27 billion.
This story has been viewed 1478 times.