Licence sales signal recovery - Ellison
Published: 16 Dec 2003 08:55 GMT
Software licensing sales helped Oracle report a slight rise in quarterly revenue on Monday, a sign that information technology spending is recovering, according to chief executive Larry Ellison.
The software maker reported earnings of 12 cents per share on revenue of $2.5bn (£1.43bn) for the second quarter, ended 30 November. Estimates from analysts compiled by research firm First Call averaged 11 cents per share on $2.4bn in revenue.
Revenue grew 8 percent compared with the same quarter last year, while earnings rose 2 cents per share. New software license sales climbed 13 percent to $849m. Software license sales are viewed on Wall Street as an important barometer of how well a software company's core products are selling.
An upswing for Oracle, which specialises in corporate software, signals a growing willingness among businesses to buy IT products after three years of slack spending. But Ellison offered a tempered view of the IT rebound.
"There is an upturn, but the upturn isn't dramatic," Ellison said during a telephone conference with securities analysts.
The company reported that new license sales of applications grew 27 percent. That growth rate outpaced that of the company's largest competitors in the market -- including SAP, Siebel Systems and PeopleSoft -- according to Oracle. The software maker has been trying to buy PeopleSoft for the past six months, through an unsolicited bid opposed by PeopleSoft.
Oracle said the fastest-growing part of its applications business is its outsourcing services, which increased 82 percent in the fourth quarter.
In the third quarter, the company expects revenue to grow by between 7 percent and 10 percent. It expects that new software license revenue will rise 5 percent to 15 percent in that quarter, which ends on 29 February. For its fiscal year 2004, the company expects "modest spending improvement," Oracle chief financial officer Jeff Henley said.
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