Oracle?s shares dropped over $3 to $36 in after hours trading yesterday, after the database supplier reported first quarter figures below analysts? expectations.
While turnover increased by 30 per cent to $1.37 billion for the quarter ended 31 August, analysts had expected revenues of $1.4 billion, but were even more concerned about the fall-off in database licence sales.
Licence revenue grew by only six per cent compared with the year-ago period, though analysts had expected growth of 20 per cent, partly on the back of the introduction of Oracle 8.
Ray Lane, Oracle?s chief executive, explained that Oracle had noticed a general slowdown in the database market over the past year or so and that he expected the trend to continue.
But, he told analysts that the slow ramp-up of Oracle 8 was expected, although he predicted database sales growth would rebound to between 25-30 per cent by the end of the fiscal year.
Other reasons cited for the decline included a particularly robust year-ago quarter, which made comparisons look worse than they really were; internal disruption following the firm?s major reorganisation during the quarter; and currency fluctations worldwide.
Oracle also reported net income that fell to $40.5 million from $112.8 millon, after $167.1 million in acquisition costs relating to the purchase of software house Treasury Services and the merger of its Network Computer Inc affiliate with Netscape?s Navio subsidiary. Earnings, however, were in line with analysts? expectations.
Sales in Europe still languished below those of other regions at 20 per cent growth, or 33 per cent in local currencies, compared with 36 per cent in the Americas (37 per cent in local currencies). Asia-Pacific also grew by 32 per cent (43 per cent in local currencies).
Application sales grew by an outstanding 96 per cent, above analysts? expectations of 75 per cent, while Oracle Services grew by 42 per cent, compared with the same period last year.
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