Oracle's Quarterly Profit Plunges 33 Percent

The Redwood Shores, Calif.-based company said Tuesday it earned $342.7 million, or 6 cents per share, for the quarter ended Aug. 31, a 33 percent drop from $510.6 million, or 9 cents per share, at the same time last year.

If not for losses on its investments in other companies, Oracle said it would have made $386 million, or 7 cents per share. That matched the consensus estimate among analysts polled by Thomson First Call.

Dragged down by sluggish sales of new software, Oracle's revenue totaled $2.03 billion, a 10 percent decline from last year's quarter. The revenue fell below analysts' consensus estimate of $2.06 billion.

The company's sales of new software licenses plunged 23 percent from last year to $549 million, deepening a slump that began in late 2000.

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In contrast to past quarters during the downturn, Oracle's performance deteriorated more dramatically internationally than in the United States, said Jeff Henley, the company's chief financial officer.

The deterioration in Europe and other international markets occurred just as the worst appeared to be over in the United States, making it even more difficult for Oracle to predict when its results will improve, Henley said.

"We are very disappointed," Henley said during an interview with reporters. "We felt things would have improved more at this point."

To offset some of its sales losses, Oracle trimmed its expenses to $1.45 billion in the quarter, a 5 percent reduction from last year. The pruning included a 1 percent decrease in Oracle's work force, translating into the elimination of about 600 jobs between May and September, Henley said.

Oracle expects to jettison several hundred more jobs before December, Henley said, but expects to avoid the deep cuts imposed by other ailing high-tech companies.

Oracle disclosed its results after the market closed Tuesday. The company's shares fell 25 cents to close at $9.03 on the Nasdaq Stock Market. The shares fell 55 cents in after-hours trading.

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