Oracle profit hits forecast but sales miss

Oracle Corp.’s quarterly profit slipped for the first time in three years as a stronger dollar took a big bite out of the business software maker’s international sales.

The Redwood City, Calif.-based company said Thursday that it earned $1.3 billion, or 25 cents a share, in its fiscal second quarter ended Nov. 30. Net income fell by $7 million from the same period last year while earnings per share remained the same.

Although it was negligible, the erosion marked Oracle’s first decline in profit since its fiscal quarter ending in November 2005.

Investors, though, focus primarily on how Oracle would have fared if it didn’t have to account for expenses covering employee stock compensation and its acquisition spree of the last four years.

Excluding those factors, Oracle said it would have earned 34 cents a share -- matching the average estimate among analysts polled by Thomson Reuters. But Oracle’s revenue of $5.61 billion, up 6% from last year, didn’t meet expectations. On average, analysts had projected revenue of $5.84 billion.

Oracle’s sales of new product licenses -- a key measure of a software maker’s health -- also drooped. Software sales totaled $1.63 billion, down 3% from last year.

In September, management had predicted that its software sales would rise between 2% and 12%.

Oracle said it would have hit its target if the dollar hadn’t become so much stronger during October and November as investors sought a safe haven from the financial turmoil.

If currency rates had been the same as a year ago, Oracle said its earnings per share would have improved by 11% and its software sales would have edged up by 5%.

Investors still seemed disappointed with the performance. After falling 13 cents to finish Thursday’s regular session at $16.61, Oracle shares shed an additional 10 cents after hours.