Shares of Oracle Corp., the database software giant, fell about 18 percent Friday after the company reported revenue growth of about 9 percent for the third quarter, with operating profits about $100 million less than anticipated.
Preliminary third-quarter results indicate that the company ended up with $900 million in operating income, as opposed to the expected $1 billion, Oracle announced Thursday. Oracle stock fell $3.62 to $17.75 on the Nasdaq exchange.
In addition, preliminary numbers show that total revenue grew by about 9 percent. While some revenue streams continued to expand, though at a slower rate than predicted, growth in its core database division was flat or slightly negative.
“License growth was strong in the first two months of Q3, and our internal sales forecast looked good up until the last few days of the quarter,” said Larry Ellison, CEO of Oracle, Redwood Shores, CA. “However, a substantial number of our customers decided to delay their IT spending based on the economic slowdown in the United States. Sales growth for Oracle products in Europe and Asia Pacific remained strong. The problem is the U.S. economy.”
Oracle is the world's second-largest software company. With annual sales of more than $10 billion, Oracle provides software that powers the Internet.
In addition, Oracle sells several software products central to database and customer relationship management marketers, including a variety of CRM and e-business applications such as iStore and TeleSales.
In addition, its database platform is the foundation for many CRM and database marketing projects currently in place. Last year Oracle purchased the assets of Thinking Machines, a data mining software vendor, and has integrated the software into its database platform.
Oracle said it would provide more detailed fourth-quarter financial guidance on March 15.
