Oracle's fourth quarter and year-end results were mixed, with record revenues and profits but weak performance in applications and Asia.
Sales of the core database products were also uninspiring, but overall the company did meet Wall Street expectations.
All said, the number two software company is probably relieved to have done with a year dogged by technical, management and business transitions. Ray Lane, Oracle's president, phrased it differently, saying: "Every several years the market tests you ... tests your strategy, tests your products and tests your management team. This year we?ve passed this test and strengthened the company. We have repositioned for Asia, introduced new releases of all our products? and simplified our organisational structure."
For the fourth quarter, total revenues grew by 24 per cent from $1.9 billion in 1997 to $2.4 billion, and profits were $403 million, up from $360 million last time. Quarterly revenue for the database unit was $1.7 billion, $600 billion for applications.
The sluggish growth in database revenues, signposted in the second quarter when revenues grew only three per cent on 1997, seems to have halted, with 13 per cent growth in both the third and fourth quarters. A one per cent decline in applications was particularly disappointing after the impressive 30 per cent growth recorded in the third quarter, but service revenues were buoyant, up 43 per cent to $1.17 million for the quarter.
Annual revenues for database and application businesses combined were $7.1 billion, and database revenues were $5.3 billion, up 17 per cent on last year. Application businesses, including the highly profitable services division, jumped by 58 per cent to $1.8 billion.
Outside north America, Asian turmoil took its toll with database sales down 29 per cent, compounding a 25 per cent decline in the third quarter. Elsewhere, sales picked up, with a 15 per cent increase in Europe, 24 per cent in north America.
Oracle restructured its salesforce and management responsibilities during the year and the changes involved Larry Ellison taking a stronger management lead at the applications division and rejigging the thin client network computer strategy to encompass other devices, including the fat PC.
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