Oracle warns of 'negative effect' on Q2 results

Oracle chief Larry Ellison predicted poor second quarter results for the company following the 11 September terrorist attacks on...

Oracle chief Larry Ellison predicted poor second quarter results for the company following the 11 September terrorist attacks on New York and Washington .

"We don't think things are recovering," Oracle chairman and chief executive officer Larry Ellison said during a conference call. "In light of the latest events in New York, we're anticipating things will get slightly worse."

Oracle last week reported first-quarter income of $510.6m (£349.2m) on revenue of $2.24bn (£1.53bn). Revenue during the first quarter dropped slightly from last year, but the company's net income showed a slight increase, up from $500.7m (£342.4m) in last year's first quarter.

Overall, the company's first quarter results reflected a slowdown of the steep decline in revenue growth that the company has seen over the last year, said Jeff Henley, executive vice president and chief financial officer at Oracle. "While (sales in) the US, Europe and Asia didn't get any worse this quarter, they certainly didn't get any better," he said.

Oracle initially expected that its second-quarter results would mirror the first quarter, which showed an 8% drop in the number of new software licences, Henley said. In light of last week's attacks however, the company has revised that estimate downward, to a 15% drop for the second quarter, while predicting that revenue growth and earnings would remain flat.

"Things are now murkier because of what happened last week," Henley said . "We know there will be some negative effect. The question is, how much?"

In addition to warning that last week's terrorist attacks would have a negative impact on the company's second-quarter, Henley also pointed to a couple of positive trends.

"We continue to believe that the US economy will slowly begin to recover in 2002," he said, adding that Oracle also expects to see some positive impact on its future results from the growing strength of the euro.

Further information
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