Oracle CFO sees tech turnaround in 2003

Lisa Baertlein

SAN FRANCISCO: The chief financial officer at Oracle Corp. said 2003 should mark the end of nearly two years of revenue declines for the world's second-biggest software maker. "Two years is a long time, even with a correction like this," Oracle CFO Jeff Henley said, referring to technology revenues that continue to shrink on the heels of the still-unwinding Internet and telecom busts.

"During the first half of calendar '03, we'll start to see this thing turn around," Henley said at OracleWorld, the database giant's technology and user conference being held here this week. After that, Henley said he expects his company to "return to positive revenue growth."

Henley sees that uptick stemming from easier comparisons against prior-year results, and from pent-up demand. "Companies are working off a lot of their projects and are ready for new projects," he said.

High-tech shops have suffered as big corporate customers -- who spent lavishly during the boom -- slashed spending in response to what started as a stock market correction in the United States and has since morphed into a global business slowdown.

For its part, Silicon Valley-based Oracle has seen sales fall for six straight quarters -- a phenomenon that prompted Henley to deem this the worst technology recession since the mid-1970s.

Cyclical Business

Oracle last traded after hours at $9.20, up from its Nasdaq close at $9.05. In an afternoon session with financial analysts, Henley said he's "increasingly encouraged." Nevertheless, the market remains somewhat difficult to predict. That's in large part due to the fact that software makers like Oracle tend to close about 40 percent of their deals in the final weeks of a quarter.

Oracle's current second quarter wraps up at month-end. To that end, he said, "we've been wrong in the past." Henley -- who was working in the semiconductor industry during the last severe tech downturn -- noted similarities between that bust of three decades ago and high-tech's current woes.

In both cases, the economy was weak and pet stocks had crashed after reaching spectacular heights, he said. The difference is that the recent tech bubble was larger and technology is far more pervasive, he said.

Many of today's investors are smarting from their wager that high-tech names like WorldCom Group, Amazon.com and even Oracle -- which topped $46 in September 2000 -- would continue to climb.

Back then, shareholders took a beating after betting that the so-called "Nifty 50" stocks, which included Walt Disney Co., McDonald's Corp., Polaroid and Xerox Corp., would defy gravity instead of crashing in 1973 after a long run up.

© Reuters