Oracle's profit declines but meets expectations

SAN FRANCISCO — Oracle Corp.'s quarterly earnings dipped slightly but still met analyst expectations, a performance unlikely to satisfy investors who have been expecting bigger things since the business software maker launched a nearly $20 billion shopping spree a year ago.

The company, based in Redwood Shores, Calif., said Thursday that it earned $798 million, or 15 cents per share, during the three months ending Nov. 30. That represented a 2 percent decrease from $815 million, or 16 cents per share, at the same time last year.

Revenue for Oracle's fiscal second quarter totaled $3.29 billion, a 19 percent increase from $2.76 billion at the same time last year. The difference largely reflects gains from several acquisitions that Oracle completed during the past year, most notably its $11.1 billion takeover of PeopleSoft Inc.

If not for accounting charges stemming mostly from the PeopleSoft purchase, Oracle would have earned 19 cents per share, matching the average estimate among analysts surveyed by Thomson Financial.

It marked the third consecutive quarter since the PeopleSoft acquisition that the company has met or surpassed analyst expectations. But the company attempted to lower the bar for the current quarter ending in February, telling analysts in a conference call that it expects to earn 19 cents per share again, excluding acquisition costs. That's a penny below analysts' current average estimate, according to Thomson Financial.

Oracle disclosed the results after the stock market closed. The company's shares gained 2 cents to close at $12.83 on the Nasdaq Stock Market, then shed 35 cents, or 2.7 percent, in extended trading.

After several years of relatively little growth in its core business of selling database software, Oracle has been busily building up its line of business applications software — the computer coding that automates a wide range of administrative tasks.

Besides snapping up PeopleSoft, Oracle already has completed a series of smaller acquisitions so far this year as it gears up to take over Siebel Systems Inc. in a $5.85 billion deal expected to close in early 2006.