January 30, 2002 6:20 PM PST

Oracle sees gradual recovery

Software maker Oracle on Wednesday reaffirmed its financial guidance for the next two quarters as executives reiterated their belief that the worst of the economic slowdown was over.

At a financial analyst conference at Oracle headquarters, Oracle Chief Financial Officer Jeff Henley said the company still expects to see overall year-over-year revenue decline in the current third quarter ending in February, and that fourth-quarter revenue will remain flat.

Despite third-quarter revenue having a percentage decline in the high teens, the company still expects to be profitable, earning 10 cents per share in the third quarter, Henley said. The database maker also expects to earn 17 cents to 18 cents per share in the fourth quarter.

"We feel we hit the bottom," he said. "I don't have fresh insights. We think this will be the low point and it's gradually getting better. The pipeline (for potential fourth-quarter sales) still feels good. I can't guarantee it will be flat. It could be worse or a little better."

Last quarter, the company earned a profit of $549 million, or 10 cents a share, on revenue of $2.36 billion.

Henley added that a recently announced pricing method for the company's suite of business applications, called the 11i Ebusiness Suite, won't affect revenue this quarter. Oracle on Tuesday altered its pricing model, saying it could save customers 25 percent to 75 percent on license fees. The package includes software for marketing, accounting and order fulfillment, among other business functions.

"The reality is (there's) no disruption in the quarter, but (it will be) a positive over the coming quarters," Henley said. "It simplifies things and makes it easier (for customers) to start on the suite."

 

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