Not looking good...
Oracle Corporation Reports Second Quarter Fiscal 1998 Results
PR Newswire, Monday, December 08, 1997 at 17:26
REDWOOD SHORES, Calif., Dec. 8 /PRNewswire/ -- Oracle Corporation
(NASDAQ:ORCL) today reported results for the quarter ended November 30, 1997.
Revenues increased 23 percent (29 percent in local currencies) to
$1,614 million from $1,311 million in the same period last year. Net income
for the period was $187 million, or $0.19 per share, compared to net income of
$179 million, or $0.18 per share, in the second quarter of fiscal 1997.
For the first six months of fiscal 1998, revenues increased 26 percent to
$2,983 million from $2,364 million in the same period last year. Net income
for the six-month period was $337 million, or $0.33 per share, compared to net
income of $292 million, or $0.29 per share, excluding one-time charges
associated with Navio and TSC acquisitions in the first fiscal quarter.
Giving effect to the charges, net income for the six-month period was
$196 million, or $0.19 per share. All of the share and per-share amounts in
this release have been adjusted to reflect the 3-for-2 stock split effective
August 15, 1997.
"Clearly, we were disappointed with the results this quarter," said
Jeffrey O. Henley, executive vice president and chief financial officer.
"While several factors impacted the quarterly license growth, the economic
situation in Asia-Pacific clearly had a significant impact. In addition, the
strength of the dollar continued to have a dramatic effect on our reported
results this quarter. Without the impact of currency exchange, overall revenue
growth would have been 29 percent. In Asia Pacific, which experienced a
14 percentage point negative currency exchange rate impact, revenue would have
grown 15 percent in local currencies (1 percent reported in US dollars). EMEA
had the second greatest negative impact from currency, reporting revenue
growth of 35 percent in local currencies (24 percent reported in US dollars).
Americas reported revenue growth of 30 percent in local currencies (29 percent
reported in US dollars), versus the same period last year."
"During the first half of the fiscal year, Oracle established industry
vertical organizations to deliver total solutions to key industries and we
implemented several new product specialist organizations to achieve better
alignment with our product divisions," said Ray Lane, Oracle president and
chief operating officer. "While the vertical organizations are delivering
larger transactions than ever before, the nature of these transactions require
that the largest of these deals be accounted for differently than last year."
Oracle Corporation is the world's leading supplier of software for
information management, and the world's second largest independent software
company. With annual revenues of over $6 billion, the company offers its
database, tools and application products, along with related consulting,
education, and support services, in more than 145 countries around the world.
For more information about Oracle, call Oracle Investor Relations at
650-506-4073. Oracle's World Wide Web address is (URL)
oracle.com.
"Safe Harbor" Statement Under the Private Securities Litigation Reform Act
1995:
Information in this release relating to Oracle's future prospects which
are "forward-looking statements" are subject to certain risks and
uncertainties that could cause actual results to differ materially, including,
but not necessarily limited to the following: (1) Management's ability to
manage growth, continuously hire and retain significant numbers of qualified
employees, forecast revenues and control expenses continues to be a challenge.
An unexpected decline in the growth rate of revenues without a corresponding
and timely slowdown in expense growth could have a material adverse effect on
results of operations. (2) The market for Oracle's products is intensely
competitive and is characterized by rapid technological advances and frequent
new product introductions. There can be no assurances that Oracle will
continue to introduce new products and new versions of existing products that
keep pace with technological developments, satisfy increasingly sophisticated
customer requirements and achieve market acceptance. (3) Intense competition
in the various markets in which Oracle competes may put pressure on Oracle to
reduce prices on certain products, particularly in the departmental database
marketplace. (4) Delays in product delivery or closing of sales can cause
quarterly revenues and income to fall significantly short of anticipated
levels. (5) Oracle is introducing new products, such as web applications
servers and network computing software; the market acceptance and contribution
to Oracle's revenues of these products cannot be assured. (6) A significant
amount of current demand for applications software may be generated by
customers in the process of replacing and upgrading applications in order to
accommodate the change in date to the year 2000. Once such customers have
completed such preparations, the software industry and Oracle may experience a
significant deceleration from the strong annual growth rates recently
experienced in the applications software marketplace. In addition, Oracle may
generally experience increased expenses in addressing issues associated with
the transition to software that is year 2000 compliant. Oracle undertakes no
obligation to update information contained in this release. For further
information regarding risks and uncertainties associated with Oracle's
business, please refer to the "Risk Factors" section of Oracle Corporation's
SEC filings, including, but not limited to, its annual report on Form 10-K for
the year ended May 31, 1997, copies of which may be obtained by contacting
Oracle Corporation's Investor Relations Department at 650-506-4073 or Oracle's
Fax-on-Demand service 800-ORCL-NOW (672-5669).
NOTE: Oracle is a registered trademark of Oracle Corporation.
ORACLE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
($ in thousands, except per share data)
(unaudited)
2nd Quarter Ended Six Months Ended
November 30, November 30,
----------------- ---------------
1997 1996 1997 1996
---- ---- ---- ----
REVENUES
Licenses and other $ 645,366 $ 624,137 $1,176,008 $1,085,985
Services 968,361 687,236 1,806,548 1,277,708
----------- ----------- ----------- -----------
Total Revenues 1,613,727 1,311,373 2,982,556 2,363,693
OPERATING EXPENSES
Sales and marketing 528,490 454,688 977,941 814,538
Cost of services 548,631 377,483 1,016,798 713,590
Research and development (A) 183,217 135,300 342,884 252,509
General and administrative 81,383 69,714 156,897 139,993
Acquired in-process research
and development (B) -- -- 167,054 --
----------- ----------- ----------- -----------
Total Operating Expenses 1,341,721 1,037,185 2,661,574 1,920,630
----------- ----------- ----------- -----------
OPERATING INCOME 272,006 274,188 320,982 443,063
Other income (expense) (B) 16,248 6,275 56,222 13,605
----------- ----------- ----------- -----------
INCOME BEFORE TAXES 288,254 280,463 377,204 456,668
Provision for income taxes 100,930 100,967 181,409 164,401
----------- ----------- ----------- -----------
NET INCOME $ 187,324 $ 179,496 $ 195,795 $ 292,267
----------- ----------- ----------- -----------
EARNINGS PER SHARE (B) $ 0.19 $ 0.18 $ 0.19 $ 0.29
Common and common equivalent
shares 1,008,558 1,013,924 1,007,412 1,012,320
(A) In accordance with Statement of Financial Accounting Standards No. 86,
$12,895 and $7,383 were capitalized in the quarters ended November 30, 1997
and 1996, respectively. Amortization of capitalized software costs was
$12,804 and $7,521 in the quarters ended November 30, 1997 and 1996,
respectively.
(B) Acquired in-process research and development represents charges of
$91,500 and $75,554, respectively, for the Treasury Services Corporation and
Navio Communications, Inc. merger transactions that closed in August, 1997.
Excluding the effect of these transactions, which also included a credit of
$25,726 for minority interest in other income (expense), the provision for
income taxes would have been 35%, and net income and earnings per share for
the first six months of fiscal 1998 would have been $337,123 and
$0.33 per share, respectively.
ORACLE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands)
November 30, May 31,
1997 1997
---- ----
(unaudited)
ASSETS
Current Assets
Cash and short-term investments $1,514,395 $1,213,190
Trade receivables, net 1,321,368 1,540,470
Prepaid and refundable income taxes 265,996 274,366
Other current assets 210,634 243,070
----------- -----------
Total Current Assets 3,312,393 3,271,096
----------- -----------
Long-term cash investments 139,863 116,337
Property and equipment, net 898,967 868,948
Computer software development costs, net 99,029 98,981
Other assets 312,465 268,953
----------- -----------
TOTAL ASSETS $4,762,717 $4,624,315
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes payable, including
current maturities $ 9,992 $ 3,361
Accounts payable 206,642 185,444
Income taxes 129,193 203,646
Customer advances and unearned revenues 615,752 602,862
Other current liabilities 762,510 926,826
----------- -----------
Total Current Liabilities 1,724,089 1,922,139
----------- -----------
Long-term debt 304,602 300,836
Long-term liabilities 57,298 24,226
Deferred income taxes 8,153 7,402
Stockholders' equity 2,668,575 2,369,712
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $4,762,717 $4,624,315
----------- -----------
SOURCE Oracle Corp.
-0- 12/08/97
/CONTACT: Catherine Buan, Investor Relations of Oracle Corporation,
415-506-4073/
/Web site: oracle.com |
