Another one to bite the dust....
(after hours trading +/- 17...) a buying opportunity ? or more of the same...
news.ft.com
Drop in licence revenues hits Oracle earnings
By Tom Foremski in San Francisco
Published: March 1 2001 22:36GMT | Last Updated: March 1 2001 23:45GMT
Oracle, the world's second largest software company, on Thursday warned it would not meet Wall Street estimates for its fiscal third quarter because of a sudden fall in licence revenue in the final days of February.
The company expects to report 10 cents a share rather than consensus financial analyst estimates of 12 cents a share.
Larry Ellison, CEO of Oracle, said the company was meeting internal sales targets up until "the last few days of the quarter." Then, a substantial number of its customers decided to delay their IT spending.
"Sales growth for Oracle products in Europe and Asia Pacific remained strong. The problem is the US economy," Mr Ellison said.
On March 15 the company will report its full results for the quarter ended February 28. Preliminary figures are for 6 per cent growth in licence revenue, total revenue growth of 9 per cent and applications revenue growth of 50 per cent, with a 4 per cent negative currency impact. Its core database software revenue will be flat or slightly below the same period last year.
In extended hours trading Oracle was down 11 per cent to $17, reversing a 12 per cent gain to $21.38 at the close of regular trading.
Jeff Henley, chief financial officer at Oracle, said, "With continued uncertainty in the economy, we can't predict when sales growth will improve."
The one bright spot for Oracle is that operating margins improved to 33 per cent from 31 per cent for the year ago period. The company attributed this to the use of its own e-business software.
Oracle had been considered somewhat immune to the slowdown in global IT spending because of its position in fast growing markets. Its earnings warning indicates that other enterprise software companies are likely to have encountered similar problems.
The company had said that strong growth in applications sales would help it through the effects of a slower economy as large companies continue to implement large e-business projects.
But many of its customers have delayed some of their e-business initiatives until there is a clearer picture on the economy and to what extent European and Asian markets will be affected. |
