| Oracle issues profit warning |
By Mike Tarsala, CBS.MarketWatch.com
Last Update: 5:18 PM ET Mar 1, 2001
REDWOOD SHORES, Calif. (CBS.MW) -- Although Oracle executives recently touted that business showed no signs of slowing down, the company warned Wall Street at the close Thursday that it will miss both profit and sales targets.
Oracle (ORCL: news, msgs, alerts) issued preliminary per-share earnings for its fiscal-third quarter of 10 cents a share, up from 8 cents a share in the year-ago quarter. But it's short of the 12-cent profit analysts expected.
That's despite operating margins that improved to 33 percent, up from 31 percent in the year-ago quarter.
Sales of the company's flagship database software are flat or slightly negative, the company announced. Total license revenue increased 6 percent; applications revenue edged up 9 percent. As well, the company's closely watched applications revenue increased 50 percent.
The Redwood Shores, Calif.-based company had been counting on double-digit database software sales growth.
"Our internal sales forecast looked good up until the last few days of the quarter," said CEO Larry Ellison in a statement. "However, a substantial number of our customers decided to delay their IT spending based on the economic slowdown in the United States."
Ellison's announcement runs counter to statements the company made to investors on Feb. 13 at an investment conference in California.
"Our pipelines around the database and applications business have never been stronger," said Sandy Sanderson, an executive vice president with Oracle, from a Feb. 13 conference on sponsored by Goldman Sachs in La Quinta, Calif. Very few customers were canceling contracts, Sanderson said. To be sure, the company closes the majority of its business in the last few days of every quarter.
Now, the company says it doesn't know when sales growth will improve.