Oracle's share price took a hit last week as first quarter revenues fell short of analysts' expectations.
For the quarter ending 31 August 1997, Oracle met with analysts' predictions for net income which was $150 million (#93.5 million), up from $113 million in the same period last year.
However, the company announced revenue growth of only 30% from $1.1 billion to $1.37 billion. Analysts were anticipating revenue of around $1.4 billion.
Revenues from Oracle's core database software had only risen 6%, compared with 44% in the same period last year. The company said this was due to the strength of the US dollar.
Analysts had been expecting Oracle database software sales growth to be around 20% as the company makes the transition to Oracle8. The new launch and problems at the company's chief rival, Informix were expected to generate higher sales.
The figures excluded charges of $59.5 million and $49.8 million, for the acquisition of Treasury Services and Navio Communications.
Revenue from applications licences jumped 96% in the quarter while overall licence revenue grew 15%.
Raymond Lane, president and COO, commented: "We were pleased with our overall performance. Areas where we focused management attention last year, such as Europe, the Middle East and Africa, verticals and Windows NT, are all showing good results. Looking ahead to the remainder of the year, Oracle8 and our Web Applications Server put us in a strong position to gain market share."
As the news of the results broke, Oracle's shares fell $3.065 or 7.7% to $36.50 on Nasdaq.
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