Oracle shakes off effects of slump

Database giant Oracle reported stronger than expected earnings after the company appeared to bounce back from the recent downturn in the sector.

For the quarter ended 31 August, Oracle's net income increased 30 per cent to $195 million, compared with $150 million for the same period last year, excluding acquisition charges that reduced net income to $8 million.

Revenue for the quarter jumped 28 per cent to $1.7 billion, from $1.4 billion last year. Database business accounted for $1.3 billion in sales, an increase of 25 per cent, while application sales rose 37 per cent to $500 million.

Oracle claimed the database sector had now recovered from its drop in sales which occurred at the end of last year and through the first two quarters of 1998.

Larry Ellison, chief executive of Oracle, said price cuts designed to fight off the competition were the reason for the slow take-up in sales, but insisted that customers were now stepping up buying again.

'We were surprised by how strong database demand was in this last quarter. It was breathtaking,' he added.

Ray Lane, chief operating officer at Oracle, agreed, adding: 'The health of the database market is improving each quarter. We have firm competitive advantage with our products.'

Oracle's figures also showed that its European business had risen by 33 per cent and the US was up 37 per cent. However, in line with the rest of the industry, sales in Asia Pacific were down 14 per cent.

The database developer was expected to release an internet version of its flagship product this week. The Oracle 8i contains software that would allow data to be downloaded from the Net and private networks to be manipulated.