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Oracle powers ahead in 2Q
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December 14, 1999: 6:23 p.m. ET
Database software firm easily beats analysts' estimates amid strong demand
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NEW YORK (CNNfn) - Oracle Corp. Tuesday recorded a 40-percent jump in its fiscal second-quarter earnings, easily beating Wall Street estimates as the Internet sparked demand for its core database products.
For the quarter ended Nov. 30, the Redwood Shores, Calif.-based company posted earnings of $384 million, or 26 cents a share. Analysts polled by First Call expected Oracle (ORCL) to earn 22 cents a share in the quarter.
Revenue jumped to $2.3 billion.
The company announced its earnings results after markets closed.
Oracle, the largest provider of database software, easily outstripped its year-ago performance, when it logged a profit of $274 million, or 19 cents a share, on $2.1 billion in revenue.
Oracle shares fell 2-7/8 to close at 76-15/16 on the Nasdaq stock market. Its shares jumped up 7 to 83-15/16 in after-hours trade, which should portend a strong open for Oracle shares when regular trading resumes Wednesday.
Oracle’s stock has been on a hot streak during the past few weeks in anticipation of strong second-quarter results. The company even beat the so-called whisper number of 25 cents a share that had circulated around trading room floors.
Software sales up
Although Oracle’s software licensing revenue has struggled in recent quarters, the company reported an 18-percent increase to $902.6 million in the second quarter. Database software sales increased 17 percent to $651 million, while applications software sales rose 31 percent to $168 million.
Jeff Henley, Oracle's chief financial officer, said in a conference call that the company could see even stronger demand in the coming quarters as Year 2000-related concerns begin to subside.
Oracle has revamped its entire product line to operate over the Internet and corporate intranets as more businesses shift their operations to a Web-based model.
"The growth of corporate intranets and the World Wide Web is driving demand for both the Oracle8i database and our applications," said Larry Ellison, Oracle's chairman and chief executive officer.
Brian Goodstadt, an analyst at S&P Equity Group, said Oracle’s applications revenue growth was strong -- particularly its customer relationship management software, which grew 300 percent to $49 million.
"The applications business was a disappointment in the last fiscal year,” said Goodstadt, who maintains a "hold” rating on Oracle. "It’s finally taken off because of their Internet strategy. They’re getting the message out to customers that they’re a legitimate e-commerce player.”
Last month, Oracle entered into a joint venture with Ford Motor Co. (F) called AutoXchange, under which Oracle will provide software to manage the automaker’s $300 billion extended supply chain over the Internet.
For the first six months of fiscal 2000, Oracle earned $621.2 million, or 41 cents a share, on $4.3 billion in revenue, compared with a first-half 1999 profit of $469 million, or 32 cents a share, on $3.8 billion in revenue. 
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Oracle
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