Oracle CEO says no need for Q4 warning

Lisa Baertlein

PALO ALTO: Oracle Corp., the world's second-biggest software maker, will not

issue a profit warning on its critical fourth-quarter, chief executive Larry

Ellison said on Wednesday.

"If we had made less than 12 cents in operating income, we would have

had to warn. We didn't warn," Ellison said at a press conference at the

company's Redwood Shores, California, headquarters.

Analysts, on average, had expected Oracle to post earnings of 12 cents a

share, according to tracking firm Thomson First Call.

Wall Street's target was less aggressive than that issued by the company in

mid-March, when Oracle chief financial officer Jeff Henley lowered his

fourth-quarter forecast to call for per-share earnings of 13 cents to 14 cents.

Oracle had posted earnings of 15 cents in the year-earlier quarter ended May 31.

Not as ugly as expected



Oracle shares fell to a multiyear low of $7.25 during the quarter, as
investors and analysts speculated that the database vendor would miss its

targets on corporations' weak appetite for large software projects that spur

multimillion-dollar purchases from such industry players as Oracle, SAP AG and

Siebel Systems Inc.

Pricing pressure has been intense throughout the software sector as

lackluster demand and fierce competition put customers in the drivers' seat.

A report from industry research group Gartner Inc. recently said that

International Business Machines Corp. had displaced Oracle as the No. 1 seller

of new database software in 2001, and helped fuel worries about Oracle's

fourth-quarter performance.

"It doesn't sound like the type of ugliness that people were

discounting," Prudential Securities Inc. analyst John McPeake said of

Ellison's comment.

Oracle, which usually pulls in about one-third of its total annual revenues

in the fourth quarter, has been keeping a tight lid on costs and until its

fiscal second quarter had not seen its year-over-year profits decline.

"They're a lot more profitable than anybody else other than

Microsoft," said Morgan Stanley analyst Charles Phillips.

Analysts expect Oracle's total quarterly revenue to be $2.6 billion, versus

$3.3 billion a year earlier. "I think they were probably, on total revenue,

down about 25 per cent," said Phillips. "That's not all that different

from what other people are doing," Phillips said, referring to Oracle

rivals such as Siebel Systems.