Hairline Rise in Profits, Oracle Reports 2% Rise

Snapping companies to streamlines its business,today reported a slim rise of 2% percent in its profit for this quarter as the company struggled with sluggish sales of its flagship database software. Larry Ellison’s baby ORACLE reported a profit of $519 million, or 10 cents a share, in its fiscal first quarter ended Aug. 31, compared with $509 million, or 10 cents a share, a year earlier. Sales grew 25 percent to $2.77 billion compared with the year-earlier period, reflecting its recent large acquisitions, including PeopleSoft and Retek.

If not for generous expenses acquiring Peoplesoft and settling a shareholder lawsuit ORACLE would have earned 14 cent a share.

Nonetheless, the company’s stock fell more than 4 percent in after-hours trading following release of the report.

Oracle experienced modest growth of 6 percent in its core database and middleware business, which had sales of $1.8 billion. New license revenue in databases and middleware grew just 1 percent.

But new license revenues for application software rose 84 percent to $127 million, reflecting sales generated by Oracle’s acquisition of PeopleSoft and other companies. Overall revenue from its applications business more than doubled to $1.1 billion.

Oracle has made or announced 10 acquisitions this year as it seeks to expand beyond the maturing database business into applications, which are software programs that run on top of database software.

In a conference call with securities analysts Thursday, Oracle Chief Executive Larry Ellison said he wasn’t disappointed by the results in the company’s bread-and-butter database business because it was consistent with long-term expectations.

Going by there returns there ambitious goal of sustaining 10% growth over next 10 years appears dissoluted.

Overall, new software license revenues were up 12 percent to $629 million for the period, and maintenance and support revenue rose 28 percent to $1.5 billion. Total software revenues rose 23 percent to $2.1 billion.

Oracle, the world’s third-largest software company, stepped up its expansion into the business applications market on Sept. 12, when it announced a plan to acquire Siebel Systems, a San Mateo maker of software for managing customer relations, for $5.9 billion.

``The transaction is digestible and integratible,’’ said Gregory Maffei, Oracle’s president and chief financial officer, speaking in a conference call with financial analysts Thursday. Maffei added that the merger with Siebel Systems should go smoothly because of what Oracle learned in the PeopleSoft acquisition.

Oracle stock fell by 1.5% this year guess the speculation regarding the dampening of profits owing to Oracles acquisitions is becoming true.