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Oracle's Ellison hints at good earnings news

Oracle chief executive Larry Ellison hints that the company will announce strong quarterly financial results on Thursday.

REDWOOD CITY, Calif.--Oracle chief executive Larry Ellison hinted Monday that the company will announce strong quarterly financial results on Thursday.

The database giant is having a great quarter, "and we're going to have a great year," Ellison predicted during a press conference, in which he discussed everything from Oracle's executive hierarchy to newly released e-business software and services.

Ellison declined further comment on Oracle's forthcoming second-quarter results. Wall Street analysts have predicted the company will earn 10 cents a share.

A strong quarter by Oracle will be good news for the technology sector, which has been hit hard recently with profit warning after profit warning. Last week, Apple Computer, Intel, Motorola and 3Com all warned of earnings shortfalls for their current quarters.

In September, Oracle reported first-quarter profits of $501 million, or 17 cents a share, compared with $237 million, or 8 cents a share, during the same period last year. First-quarter revenue reached $2.3 billion, a 15 percent gain over the previous year.

Ellison also said he has no plans to replace president and chief operating officer Ray Lane and executive vice president Gary Bloom, who both recently left the company. Bloom recently took the top job at Veritas Software.

Instead of replacing the pair, Ellison said he has installed an executive team of 12 people who report directly to him, including chief financial officer Jeff Henley, chief marketing officer Mark Jarvis, executive vice president of U.S. sales George Roberts, and Charles Rozwat, executive vice president of server technologies.

Ellison said he is spreading the workload out to the dozen people, allowing them to assume the duties of the departed executives.

"The management team is stronger," he said.

Ellison said the structure was patterned after Jack Welch's management team during his tenure as CEO of General Electric.

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Ellison outlines Web initiative
Larry Ellison, CEO, Oracle
The move to give existing executives more responsibilities is designed to stave off the number of executives who leave to run their own companies, an Oracle representative said. For example, Bloom, who ran Oracle's marketing, support and education divisions and a venture capital fund, has said he resigned because it was clear that Ellison didn't plan to step down anytime soon as CEO.

Some financial analysts have said one reason for Oracle's recent stock decline could be that investors were concerned there was no clear No. 2 leader behind Ellison once Lane left. But when asked whether Oracle needed a replacement for Lane as second in command, Ellison said no.

"A lot of people have left" over the years, he said. "And we continue to get stronger and stronger."

Oracle announced a new service Monday that allows companies to create Web portals for their employees, customers and suppliers. Oracle will host the service for businesses, which can use it to access Oracle's online services, such as Oracle BusinessOnline, financial software that companies can rent for a fee.

Ellison said the online services are not yet making a big contribution to revenue, but he expects they will in the future. The company in the future will have two revenue streams: its existing database and e-business software that people can buy and install themselves, and new hosted application services that will be rented online.

"This is an all-new business for us," he said, referring to online services. "It takes awhile to gain traction."

Ellison added that the company is on track to save another $1 billion this year in cost-cutting. The company last fiscal year slashed $1 billion in costs.