Oracle expects licence sales to fall

Vendor still 'pretty happy' with Q1 results

Oracle expects its software licence sales to fall by as much as 15 per cent following last month's terrorist attacks in the US.

The vendor reported a first-quarter profit of $511m compared with a profit of $500.7m on the same period 12 months ago. Overall turnover dropped by less than one per cent to $2.24bn, compared with $2.26bn last year.

While new software licence sales dropped by eight per cent in the period, chief executive Larry Ellison told analysts last week that he anticipates the situation "to get slightly worse in light of the events in New York".

The company had postponed discussion of its first-quarter results until last week as a mark of respect to the victims of the disaster. Todd Beamer, an Oracle account manager, was on one of the hijacked planes and seven other employees are still missing in the rubble of the World Trade Center.

But Ellison remained bullish about the company's future, insisting that it will remain profitable and citing large contract wins, such as the deployment of the Oracle ebusiness suite across Dell's global offices, as an example.

Chief financial officer Jeff Henley maintained that the company was "pretty happy" with the results.

"Last year, sales to internet companies were booming. That boom is over and those sales have largely disappeared; yet our revenue was down by only one per cent, and we managed to deliver profit by improving our margins," he said.

Chris Jones, senior analyst at Canalys.com, said: "Until now software companies haven't been as badly affected by the slowdown as some hardware companies.

"It has taken a long time for companies like Oracle to be affected by the slowdown, but there are going to be a lot more revised expectations from software companies in the near future."