19 June 2002 Database software giant Oracle has unveiled fourth quarter net income down by almost a quarter on revenues that fell by 16%. Oracle’s disappointing results followed similarly gloomy announcements from PC maker Apple and semiconductor company Advanced Micro Devices (AMD).
For the fourth quarter to the end of May 2002, Oracle posted revenues down 15.7% to $2.77 billion (€2.9bn) and net income down 23.3% to $655.9 million (€686.9m). For the full year, Oracle revenues plunged by more than a billion, from $10.96 billion (€11.48bn) to $9.67 billion (€10.13bn) – a fall of 11.8%.
Although a far cry from the helter-skelter growth that Oracle enjoyed during the 1990s, the results were slightly better than expected by financial analysts. Furthermore, Oracle managed to cut expenses by 22% to $1.5 billion (€1.6bn) from $2 billion (€2.1bn) during the fourth quarter.
This helped it to improve operating margins to 44% from 35% in the previous quarter, which cheered analysts. It also reassured staff by saying that it will not need to cut any more of its work force in the future.
At the same time that Oracle was reporting, AMD and Apple both warned that their next set of results will be lower than expected.
AMD, which is stuck in a fierce price war with market leader Intel, said on Tuesday that its second-quarter 2002 revenues could be as much as 26% lower than analysts estimates. The warning comes just over a week after Intel said its own revenues and gross profit margin would be lower than expected.
The analyst consensus calculated by Thomson Financial/First Call, had put AMD’s expected revenues at $841 million (€879m) for the second quarter of 2002. However, AMD says it now expects sales to be between $620 million (€648m) and $700 million (€731.7m).
AMD’s warning suggests that Intel is regaining the upper-hand in the PC processor price war initiated by AMD when it released its Athlon microprocessor in 2000. During 2002, Intel has managed to crank-up the clock speed of its competing Pentium 4 enough to be able to reclaim its position as the faster PC microprocessor.
Intel and AMD will release their results on June 16th and 17th respectively.
Apple has warned that its sales for the quarter ending June 2002 will be down by 9% to between $1.4 billion (€1.5bn) to $1.45 billion (€1.52bn) from the previously forecast $1.6 billion (€1.7bn).