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Oracle silent about analyst's prediction

A company executive says software sales look slow for the next few quarters but declines to comment on predictions that Oracle may issue a warning soon.

SAN FRANCISCO--An Oracle executive said Monday that software sales look slow for the next few quarters but declined to comment on a financial analyst's prediction that the company may issue an earnings warning soon.

George Roberts, Oracle's executive vice president of North American sales, said the turbulent U.S. economy makes demand for Oracle's software difficult to gauge. But business appears slow for the next two or three quarters, he said, as customers tighten their wallets.

Roberts, who spoke at J.P. Morgan H&Q's conference here on Monday, declined to comment on the report that Oracle may have to announce an earnings warning for the current fiscal fourth quarter ending in May.

Analyst James Moore of Deutsche Banc Alex Brown said in a report Monday that there's a high probability the company will have to reduce its fourth-quarter earnings estimates next month. Oracle executives in March lowered their fourth-quarter forecasts, telling analysts to expect flat revenue growth, which would result in earnings of 15 cents a share.

"We believe Oracle's guidance...was rather aggressive considering the current macro-environment, limited visibility and recent signs of increased pricing pressure" on Oracle's business software, Moore wrote.

Oracle is the No. 1 maker of databases, software that stores and collects corporate and Web data. Oracle also sells business software that runs companies' internal operations, such as sales, marketing and financials.

In response to predictions of a fourth-quarter earnings warning, Roberts said, "The good news is that we live in a free country, so people can say what they want."

Last quarter, the slowing U.S. economy forced Oracle to issue a profit warning as sales of its flagship database software slowed. The company later went on to meet revised estimates with third-quarter net income of $583 million, or 10 cents a share, on revenue of $2.7 billion.

Intel executives had predicted a seasonal pickup in sales during the second half of the calendar year. Roberts said Oracle's customers were giving no signs whether they would spend more or less money on software during the second half of the calendar year.

"Customers aren't telling us anything," he said. "Customers are mostly focused on capital preservation" at the present time.

Roberts' comments on Monday echoed remarks by Oracle Chief Executive Larry Ellison, who said business executives are delaying their software purchases because of the slowing economy.

Last week, Ellison said he expects the U.S. economy to pick up late in 2001 or during the first quarter of next year.