Oracle officials told analysts Monday that it is bracing for flat earnings and slumping sales as a result of business disruptions following last week's terrorist attacks on New York and Washington, D.C.

Oracle pulled in $511 million in income and revenue of $2.2 billion in its first quarter, the company announced last week. The results were disappointing considering Oracle's earnings increased by only a penny from earnings of $0.08 one year ago, and income in the first quarter of 2000 was just more than $500 million.

In addition, new software license sales were down 8 percent in the quarter. On Monday Oracle officials admitted that number may rise to as high as 15 percent, and that visibility has decreased in the aftermath of the terrorist attacks.

However, Oracle tried to remain upbeat yesterday. Oracle CFO Jeff Henley said first quarter operating margins increased from 29 percent to 33 percent. Software license renewals and product support services increased 9 percent.

"Given the weak economy, we're pretty happy with our results this quarter," Henley said in a press statement. "Last year, sales to Internet companies were booming. That boom is over and those sales have largely disappeared; yet our revenue was down only 1 percent, and we managed to deliver record profits by improving our margins."

The Wall Street consensus for Oracle's second quarter is earnings of 11 cents a share and slightly higher revenue at $2.67 billion. J.P. Morgan analysts cut their second quarter estimates from $2.7 billion to 2.6 billion today. According to the Nasdaq market, the financial analysts consensus still lists Oracle under "buy." Unlike other software firms, Oracle has yet to slash its research and development budget or initiate wide-scale layoffs.

Oracle shares are currently trading at approximately $11.20, about one dollar above the company's 52-week low of $10.24. Oracle's 52-week high is $43.31, but the world's second biggest software company has seen a steady decline since July.

Oracle postponed its first quarter results call with analysts last Thursday, issuing only the financial results in a press statement, in light of the terrorist attacks. Oracle lost one employee and has seven others missing in connection to the World Trade Center attacks in New York.