Vulnerability seen in Oracle results
- Reduce text size Decrease text size
- Increase text size Increase text size
- Print article Print
- Jump to comments Comment
- Share this article Share
- Email article to a friend Email
Profit up but analysts see impact of downturn in disappointing revenue growth
While Oracle’s profits grew during the quarter, that revenue growth was not as impressive as investment analysts had predicted, and shares in the company fell by more than 8% after the results were published.
Investors took the disappointing growth as a sign that economic downturn in US would negatively impact the enterprise software market and shares in rival application maker SAP also dropped following Oracle’s results.
“Customers got a little more cautious at the end of the quarter, given what was going on in the financial market,'' Oracle's CFO admitted on an conference call.
According to David Mitchell, analyst for IT market watchers Ovum, the speculation surrounding Oracle's current set of results sets the stage for a make-or-break fourth financial quarter.
"There are elements of the continued success in the latest results but there are signs that the global fiscal problems are beginning to have an impact in the industry," Mitchell said today. "This makes Q4 more interesting than ever in the Oracle economy and with more at stake than ever.”
The fastest-growing segment of Oracle’s business was its database and middleware segment which grew by 20% (using US dollars, rather than constant currency). But new license revenues – an important figure for investors as it foreshadows continued service contracts – grew by just 7%.
Further reading
No signs of downturn from industry giants - yet The much-predicted economic downturn has yet to manifest in the financial results of the tech industry's largest names.
Oracle, Software AG enjoy the spoils of SOA
Find more stories in the Business Applications and SOA & Development briefing rooms
