|
Oracle warns on 2Q
|
 |
November 13, 2001: 10:05 a.m. ET
But CEO Ellison sees rebound next year led by large customers.
By Staff Writer Richard Richtmyer
|
LAS VEGAS (CNN/Money) - The head of software maker Oracle said profit in the current quarter is likely to fall below Wall Street's expectations as business conditions continue to weaken in the wake of the Sept. 11 terrorist attacks.
At the same time, Oracle chairman and CEO Larry Ellison sees a rebound next year as large corporate customers who have put off new technology purchases start spending again.
Oracle (ORCL: down $0.33 to $15.07, Research, Estimates) stock fell about 2 percent in early trading after Ellison's remarks, made late Monday at the Comdex technology conference here.
In his remarks, Ellison said it was unlikely the company will earn the 11 cents per share analysts polled by First Call currently are forecasting for Oracle's fiscal second quarter, which runs through the end of this month.
"I think that's going to be difficult to achieve," Ellison said. "It will be more in the area of 9 or 10 cents." The company earned 11 cents a share on the same basis a year ago.
| |
|
|
Oracle's Larry Ellison says the software maker will miss estimates for the current quarter but he expects a rebound in corporate technology spending soon. | |
Ellison stressed that his current profit guidance would still amount to roughly $1 billion in profit in an environment in which many of Oracle's competitors are operating in the red.
"We will still be enormously profitable and by far the most profitable enterprise software company," Ellison said.
Analysts' estimates range from a low of 9 cents per share to a high of 12 cents per share.
During the fiscal first quarter, Oracle, the No. 2 independent software maker behind Microsoft Corp. (MSFT: Research, Estimates), logged a profit of 9 cents per share, beating Wall Street's estimates, on $2.24 billion in sales.
"Last quarter we got through it with record profitability record margins," Ellison said. "In light of Sept. 11, it will be very difficult for us to do that again this quarter."
Click here for Comdex special report
He said things are going to start picking up again next year as customers who had deferred information technology purchases begin to spend again.
"What we are seeing is delay," he said. "Our largest customers can delay by a quarter buying our software. They can delay by two quarters buying our software. But eventually, they have to buy."
And when companies do start buying again, the sales staff at Oracle will be aggressively pitching the company's newest 9i database software, if Ellison's keynote later Monday evening is any indication.
In what could only be described at a full-out assault, Ellison took the stage and derided competing products from Microsoft and IBM, two of his company's key rivals, highlighting what he called 9i's superior performance, reliability and security.
He began his presentation and supported his claims by pointing to comments Microsoft Chairman Bill Gates gave when he kicked off the conference Sunday night. In his keynote, Gates described a problem with some computer systems not being "fault tolerant."
Taking a particular aim at Microsoft, Ellison also demonstrated to the audience how Oracle 9i could be used to replace the Microsoft Exchange server applications that commonly power corporate e-mail systems using Microsoft's Outlook e-mail client.
Click here to look at software stocks
He said large customers could replace hundreds of Exchange servers with a handful of Oracle databases, which he said would reduce the amount of software, hardware and administration needed for e-mail while at the same time offering enhanced functionality, reliability and security.
"In most companies, one database replaces dozens of Exchange servers," Ellison said. 
|
|
|
|
|
|
|
