Ellison says Oracle's first quarter "looks good"
By Bloomberg News Special to CNET News.com
August 22, 1999, 9:10 p.m. PT
CANNES, France--Oracle chief executive Larry Ellison
said the world's largest database software maker is on
track to meet fiscal first-quarter earnings estimates, just
days after its shares fell on profit concerns.
"The quarter looks good," Ellison said in an interview at the
Carlton Hotel's outdoor cafe. He cautioned that most of
Oracle's sales come at the end of a quarter, so the profit
outcome could change. Its first quarter ends this month.
Oracle has been criticized for not being able to better forecast its
business and sales. The Redwood City, California-based company has
tried to improve its financial controls and the sales process by
handing out assignments earlier to salespeople and generating sales
leads for the next quarter.
Ellison was meeting at the seaside cafe with fellow billionaire
Saudi Prince Alwaleed bin Talal and his wife. Alwaleed's yacht is
docked next to Ellison's yacht Kitana, which means "samurai sword."
Oracle's shares fell 5 percent Wednesday on concern that its
sales-force reorganization may cause some disruption in sales.
Joseph Farley, an analyst at Donaldson, Lufkin & Jenrette,
said in a report that Oracle's shuffling of its sales force might
cause problems in the first quarter. He also said consulting
revenue may be weaker than in the year-earlier period.
Still, Farley didn't change his "market performance" rating on
the stock or his first-quarter earnings estimate of 17 cents a
share. Oracle is expected to earn 16 cents, the average
estimate of analysts polled by First Call Corp.
Ellison also said the company is progressing on its plan to cut $1 billion
in expenses over the next 18 months. He said margins will improve.
"There will be a 10-point improvement by the end of the fiscal year," he said.
The bulk of the expense reduction won't be achieved through
job cuts, Ellison said. Oracle will reduce some costs through
employee attrition, he said, though the number of sales and
marketing employees will be little change. "It's not about layoffs," Ellison said.
Copyright 1999, Bloomberg L.P. All Rights Reserved.
|
