Oracle sales miss forecasts, shares plunge

Larger Smaller Reset (Dec 20): Oracle Corp's profit missed Wall Street's
forecasts for the first time in a decade after new software sales
sputtered, hammering its shares and stoking fears that a global economic
slowdown is hurting tech spending.

Shares in the world's No. 3
software maker plunged more than 10 percent after executives also
unveiled weak sales projections for the current, fiscal third quarter.

The company posted an unexpected sequential decline in the revenue it
gets for providing maintenance on its software products -- one of the
most lucrative parts of its business.

That hasn't happened since
the fall of 2008, when the financial crisis began with the collapse of
Lehman Brothers, said Cowen & Co analyst Peter Goldmacher.


Analysts warned that Oracle's dismal fiscal second-quarter results boded
ill for industry peers. SAP AG's U.S. stock was down 5 percent, while
Salesforce.com Inc was off 2 percent in after-hours trading.


"Tech spending is more under pressure than people thought," Goldmacher
said. "IT budgets have been relatively flat, when you have issues like
you do in Europe, people naturally pull back."

Oracle was among
the first major TECHNOLOGY [] companies to report results spanning
November, offering the latest snapshot of the state of worldwide IT
spending. Some analysts said its disastrous showing presaged weaker
results from the industry.

It reported profit excluding items of
54 cents per share in its second quarter ended Nov. 30, missing the
average analyst forecast of 57 cents, according to Thomson Reuters
I/B/E/S.

"Every technology company is going to get hit. This is just the start," said Global Equities Research analyst Trip Chowdhry.

ILL WINDS

Signs are emerging of a widening global economic slowdown as Europe,
which experts say is headed into a recession, gropes for a solution to
its over-indebtedness.

Oracle has heavy exposure to the region.
New software sales rose 2 percent from a year earlier to $2 billion
during the quarter. Analysts, on average, were expecting new software
sales of $2.2 billion, according to StreetAccount.

For the
current, fiscal third quarter, Oracle on Tuesday projected new software
sales growth of zero to 10 percent, lagging an average forecast for
about 7 percent growth according to StreetAccount.

The company
also reported that hardware product sales fell 14 percent to $953
million, below the average Street account forecast of $1.06 billion. On
Tuesday, executives told analysts on a conference call that it expected
hard revenue declines of between 5 and 15 percent. StreetAccount had
compiled an average forecast of a dip of 0.5 percent.

Oracle's software maintenance revenue fell to $3.99 billion during the second quarter from $4.02 billion in the first quarter.

The company's shares fell to $26.15 in extended trade from their Nasdaq close of $29.17. - Reuters