Oracle shares slip after 1Q revenue disappoints

Sep 17, 2009 By JORDAN ROBERTSON , AP Technology Writer
FILE - In this Dec. 19, 2007 file photo, the exterior of the Oracle Corp. headquarters in Redwood City, Calif. is shown. Oracle Corp.'s profit rose 4 percent in the latest quarter, matching Wall Street's forecasts Wednesday, Sept. 16, 2009, despite a drop in sales that revealed businesses are still being tightfisted about buying new software. (AP Photo/Paul Sakuma, file)

(AP) -- Shares of Oracle Corp. slipped in premarket activity Thursday after the information technology company reported sales fell below analyst expectations in the latest quarter, showing that businesses are still reluctant to buy new software.

The stock slid 68 cents, or 3 percent, to $21.45 ahead of the opening bell, edging back from their 52-week high of $22.95 hit last week.

Oracle said late Wednesday its profit rose 4 percent in its fiscal first quarter ended Aug. 31, matching Wall Street's forecasts. But of new software licenses fell 17 percent to $1 billion.

Meanwhile, revenue from software updates and technical support contracts climbed 6 percent to $3.1 billion. While many businesses are still hesitant to pay for new software, existing Oracle customers usually pay the company to do the follow-up work on software they've already bought.

The increase in support work helped lift Oracle's net income for the quarter to $1.12 billion, or 22 cents per share, from $1.08 billion, or 21 cents per share, in the same quarter a year ago.

Excluding one-time items, profit was 30 cents per share, matching the average estimate of analysts polled by Thomson Reuters.

Sales fell 5 percent to $5.05 billion, short of expectations for $5.25 billion. Oracle said sales would have fallen just 1 percent were it not for currency fluctuations, which change the value of deals done in other currencies when they're converted into dollars.

Guidance for Oracle's fiscal second quarter were in line with analysts' projections.

Oracle expects profit of 35 cents to 36 cents per share, excluding one-time items. Analysts forecast profit of 36 cents per share, on average. The company expects revenue to be flat to up 3 percent over last year, which translates to a range of $5.6 billion to $5.77 billion. Analysts predict revenue of $5.72 billion.

Oracle sees revenue from new software licenses coming in flat to down 10 percent from last year.

Oracle is the world's No. 1 seller of database software, which companies use to archive and retrieve data such as payroll or customer information. Based in Redwood Shores, Calif., Oracle is also a major player in the market for "middleware" - software that allows computing applications to talk to each other.

The company, run by billionaire Larry Ellison, is trying to branch out by buying struggling computer server maker Sun Microsystems Inc. for $7.4 billion, a deal that would thrust Oracle into the hardware market, a new area for the company.

The deal is being held up by European Union antitrust regulators, who are worried about Oracle's plans for Sun's MySQL open-source database, which is popular among Web companies and competes against Oracle's proprietary database. The underlying programming code for open-source software is distributed for free on the Internet; companies make money off it by selling support contracts for products built from that code.

There's still uncertainty about how the transaction will play out, but Oracle is moving ahead with plans for Oracle-Sun products. On Tuesday the companies announced a new "database machine," which combines Oracle's software with Sun computers. Oracle had previously made such a system with Hewlett-Packard Co.

Oracle also said Wednesday that its board of directors has declared a dividend of 5 cents per share for shareholders as of Oct. 14. The dividend will be paid Nov. 4.

©2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Explore further: Global, Chinese automakers debut new car models

Related Stories

Oracle tops forecasts despite sales, profit dip

Jun 23, 2009

(AP) -- Software maker Oracle Corp.'s results topped Wall Street's forecast for the latest quarter Tuesday, despite a 5 percent drop in sales and a 7 percent decline in profit.

Soft PC sales send Microsoft profit down 29 pct

Jul 23, 2009

(AP) -- Microsoft Corp. said Thursday its profit in the last quarter plunged 29 percent because of weak computer sales, ending a fiscal year in which the software maker's revenue fell for the first time since ...

Texas Instruments 2Q profit falls 56 percent

Jul 20, 2009

(AP) -- Chip maker Texas Instruments says its second-quarter earnings fell 56 percent from a year ago, clipped by a weak economy that the company expects will "take some time" to strengthen.

Oracle manages 3Q feat: healthy contract signings

Mar 18, 2009

(AP) -- Oracle Corp.'s sales force pulled off a big feat in the business software maker's latest quarter, sustaining a healthy clip of contract signings amid a dreary time for technology spending.

Sun absorbs $147M loss as Oracle deal looms

Aug 29, 2009

(AP) -- Sun Microsystems Inc. recorded a $147 million loss while sales eroded 31 percent in the April-June period, likely the server and software maker's last full quarter as an independent company.

Recommended for you

IBM earnings dip as sales fall again

4 hours ago

Technology heavyweight IBM reported Monday lower profits in the first quarter following another drop in revenues, this time partly due to the strong dollar.

Global, Chinese automakers debut new car models

15 hours ago

Ford showed off its new Taurus and Nissan unveiled a midsize sedan designed for China on Monday at a Shanghai Auto Show that highlighted the commercial resurgence of lower-priced Chinese auto brands.

Germany still has some way to go to 'smart factories'

Apr 19, 2015

Collaborative robots and intelligent machinery may have wowed the crowds at this year's Hannover Messe, but experts see German industry as having some way to go towards incorporating them on factory floors ...

Taiwan factory workers win $18 mn over cancer deaths

Apr 17, 2015

Workers from a factory in Taiwan which leeched toxic chemicals they say resulted in 200 deaths from cancer and more than 1,000 other cases of the disease won a Tw$564.45 million ($18 million) payout from US electronics company ...

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.