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Oracle 2Q beats estimates
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December 10, 1998: 6:50 p.m. ET
Database software giant earnings grow 46%, revenue jumps 27%
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NEW YORK (CNNfn) - Oracle Corp. Thursday reported fiscal second-quarter earnings well ahead of Wall Street forecasts as the company's core database software business grew 25 percent.
For the three months ended November 30, Oracle (ORCL ) earned $274 million, or 28 cents a share, up 46 percent from $187 million, or 19 cents a share reported a year ago. Revenue rose 27 percent to $2.1 billion.
The profit easily beat analyst estimates of 24 cents a share, according to First Call.
After reporting a dismal second quarter a year ago, Oracle has exceeded Wall Street estimates in its last four quarters. Thursday also marked the second quarter in a row that Oracle, the world's largest provider of database software, has beaten Wall Street forecasts by 4 cents a share.
Oracle shares finished 1-11/16 lower at 34-15/16 but climbed as high as 36-1/2 in after-hours trading.
Database sales strong
Much of Oracle's growth was driven by solid results from the company's database and application businesses. Revenue from the company's database business grew to $1.5 billion, 25 percent ahead of last-year's figures, while its applications and services business grew 35 percent to $578 million.
Oracle is the second-largest software applications company, behind Germany's SAP AG (SAP ).
"Our database revenue growth accelerated as Oracle has become the database of choice for Internet commerce," said Lawrence Ellison, Oracle chairman and chief executive officer. "Nine of the top 10 business-to-business e-commerce Web sites use the Oracle database."
Oracle has been engaged in a fierce battle with Microsoft Corp. (MSFT ) in the database software market. Microsoft recently released SQL Server 7.0, which is fully integrated with the company's ubiquitous Microsoft Office suite of business software.
Microsoft hopes to leverage its huge installed base of Microsoft Office customers to draw corporate clients to SQL 7.0.
Oracle, meanwhile, is aiming for even higher ground with Oracle 8i. The company calls Oracle 8i an "Internet operating system," claiming it is designed to compete against Microsoft's Windows NT operating system rather than SQL 7.0.
Looking ahead to the rest of fiscal 1999, Oracle Chief Operating Officer Ray Lane said the company will begin feeling a negative financial impact from year-2000 issues, though he did not detail what kind of effect those issues would have.
The corporate database market is particularly lucrative. Oracle reported 40-percent growth for orders priced higher than $500,000. But customers will shy away from committing to such purchases until they've resolved their year-2000 compatibility issues.
Lane said about 40 percent of Oracle's customers are fully year-2000-compliant. "The rest are in the process of getting there," he added.
For the six months ended November 30, Oracle reported earnings of $469 million, or 48 cents a share, on revenue of $3.8 billion, compared with earnings of $195.8 million, or 19 cents a diluted share, on $2.98 billion in revenue in the year-ago period. 
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Oracle
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