Oracle meets reduced forecasts

Oracle (Nasdaq: ORCL) met analysts' lowered third-quarter expectations.

After market close Thursday, the business software vendor reported third-quarter net income of $583 million, or 10 cents per share. That was in line with the mean estimate of 30 analysts surveyed by earnings tracking firm First Call, and in line with Oracle's warning two weeks ago.

Prior to Oracle's caution, First Call consensus was predicting a profit of 12 cents per share.

Shares of Oracle traded at $15 in after-hours activity on the Island ECN, immediately following the release of quarterly results. Oracle fell $1.38 to $14.69 in Thursday's regular trading ahead of the earnings report.

Third-quarter revenue rose 12.5 percent year-over-year to $2.7 billion. Database software revenue increased 6 percent to $823 million. Sales of application software, which generally has been pegged as the key to Oracle's future growth, grew 25 percent to $249 million.

Company executives reiterated their previously stated belief that the U.S. economy is to blame for the disappointing quarterly results.

"The U.S. economic downturn over the past several months clearly affected our revenue and profit growth more than we anticipated, due to a sharp downturn in completed transactions in the last few days of the quarter, and the current economic uncertainty continues to limit our visibility going forward," CFO Jeffrey O. Henley said. "Our ongoing efforts to improve our cost structure over the past two years have positioned us well to weather the current economic storm."

Oracle's operating margin in the third quarter was 33 percent, up 2 percentage points from the comparable period a year earlier.

Details to follow.>