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REDWOOD SHORES, Calif.
15-MAR-2001 06:00 AM
Today, Oracle Corporation announced that third quarter income increased 16% to $583 million or $0.10 per share, while revenue grew to $2.7 billion. This compares to $2.4 billion in revenue, $503 million in net income, and $0.08 per share in Q3 last year, excluding extraordinary investment gains. Application software sales increased 25% to $249 million while database software sales grew 6% to $823 million. Service revenue increased 12% to $1.5 billion for the quarter.
Oracle has over 3,000 customers in the process of implementing the 11i E-business suite. More than 210 of those customers have already gone live on 11i applications including JDS Uniphase, TeliaNet, Compaq, Fosters Brewing Company, and Westpac. This past quarter, hundreds of additional companies have committed to the E-business Suite including Healthsouth, Cisco Systems, Qwest Communications, Americredit, CIENA, and McGraw-Hill Education.
"Rapid application implementation is the key to customers getting a quick return on their software investment," said Oracle CEO Larry Ellison. "Oracle applications are ideally suited for rapid implementations because our E-business suite is complete and integrated -- no application customizations are required. Customers can begin selling more with our Global CRM in 90 days, and spending less with our Internet Procurement in 30 days. No other applications can be implemented so quickly and inexpensively. Rapid application implementation is important in this economic climate because companies focus on projects with a rapid ROI."
"The U.S. economic downturn over the past several months clearly affected our revenue and profit growth more than we anticipated, due to a sharp downturn in completed transactions in the last few days of the quarter, and the current economic uncertainty continues to limit our visibility going forward," said Oracle CFO Jeffrey O. Henley. "However, we are proud of our ability to achieve 33% operating margins in the quarter, resulting in a 2 percentage point improvement compared to last year. Our ongoing efforts to improve our cost structure over the past two years have positioned us well to weather the current economic storm. Looking ahead, we plan to tightly adhere to the e-business cost reduction plan already in place, which hopefully will allow us to maintain our improvements in productivity and efficiency despite a difficult environment."
Oracle Corporation is the world's second largest software company. With annual sales of more than $10.9 billion, Oracle provides the software that powers the Internet. For more information about Oracle, please call Investor Relations at (650) 506-4073 or visit Oracle on the web at .
"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995: Information in this release relating to Oracle's future prospects which are "forward-looking statements" are subject to certain risks and uncertainties that could cause actual results to differ materially, including, but not necessarily limited to, the following: (1) A weakening of economic factors, particularly in the United States economy, may affect the overall demand for computer software and services which could result in decreased revenues or lower revenue growth rates. (2) Delays in closing of sales or product delivery can cause quarterly revenues and income to fall significantly short of anticipated levels. (3) Oracle is introducing new products, such as internet procurement and supply chain management software, customer relationship management applications and application hosting services, as well as assisting its customers in forming exchanges for a number of business procurement needs; the market acceptance and contribution to Oracle's revenues of these products and exchanges cannot be assured. (4) Management's ability to manage growth, continuously hire and retain significant numbers of qualified employees, forecast revenues and control expenses, especially on a quarterly basis, continues to be a challenge. An unexpected decline in the growth rate of revenues without a corresponding and timely slowdown in expense growth could have a material adverse effect
on results of operations. (5) Oracle has made changes to its pricing model which could lead to a decline or delay in sales as its sales force and customers adjust to the new pricing policies and practices. Intense competition in the various markets in which Oracle competes may also put pressure on Oracle to reduce prices on certain products. (6) The market for Oracle's products is intensely competitive and is characterized by rapid technological advances and frequent new product introductions. There can be no assurances that Oracle will continue to introduce new products and new versions of existing products that keep pace with technological developments, satisfy increasingly sophisticated customer requirements and achieve market acceptance. Oracle undertakes no obligation to update information contained in this release. For further information regarding risks and uncertainties associated with Oracle's business, please refer to the "Risk Factors" section of Oracle Corporation's SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting Oracle Corporation's Investor Relations Department at (650) 506-4073 or Oracle's Investor Relations website at /investor
ORACLE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
February February
2001 2000 2001 2000
REVENUES
Licenses and other $1,125,083 $1,071,373 $3,050,559 $2,606,186
Services 1,549,284 1,378,045 4,545,229 4,149,632
Total revenues 2,674,367 2,449,418 7,595,788 6,755,818
OPERATING EXPENSES
Sales and marketing 665,605 594,696 1,879,434 1,764,555
Cost of services 708,614 707,261 2,077,490 2,217,181
Research and development 301,455 255,552 818,762 739,653
General and
administrative 120,570 122,188 337,937 342,780
Total operating
expenses 1,796,244 1,679,697 5,113,623 5,064,169
OPERATING INCOME 878,123 769,721 2,482,165 1,691,649
Net investment
gains (losses)
related to marketable
securities (A) (22,437) 423,882 (20,472) 415,459
Other income, net 47,745 15,727 183,862 57,947
INCOME BEFORE TAXES 903,431 1,209,330 2,645,555 2,165,055
Provision for income
taxes 320,718 446,154 939,353 780,659
NET INCOME $582,713 $763,176 $1,706,202 $1,384,396
EARNINGS PER SHARE
Basic $0.10 $0.14 $0.30 $0.24
Diluted $0.10 $0.13 $0.29 $0.23
WEIGHTED SHARES OUTSTANDING
Basic 5,595,808 5,637,878 5,594,765 5,692,500
Diluted 5,851,333 5,996,378 5,886,397 5,991,260
(A) Net investment gains (losses) related to marketable securities in the
quarter ended February 28, 2001 relate to sales of marketable
securities, provision for investment losses, and the Company's equity
share in the results of non-consolidated subsidiaries.
Net investment gains related to marketable securities in the quarter
ended February 29, 2000 relate to the gain on sale of existing shares
in Liberate Technologies in connection with its Secondary Public
Offering, gains on sales of other marketable securities, and the
Company's equity share in the results of non-consolidated
subsidiaries. Excluding the effect of these transactions, the
effective tax rate and provision for income taxes would have been 36%
and $282,760, respectively, and net income and fully diluted earnings
per share for the quarter ended February 29, 2000 would have been
$502,688 and $0.08, respectively.
ORACLE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands)
February 28, May 31,
2001 2000
(unaudited)
ASSETS
Current Assets
Cash and short term investments $4,985,238 $7,761,998
Trade receivables, net 1,952,119 2,533,964
Prepaid and refundable income taxes 210,534 212,829
Other current assets 311,151 374,543
Total current assets 7,459,042 10,883,334
Long-term cash investments 10,000 110,000
Property and equipment, net 946,268 934,455
Prepaid taxes 261,326 322,379
Other assets 774,104 826,611
TOTAL ASSETS $9,450,740 $13,076,779
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes payable, including current maturities $2,814 $2,691
Accounts payable 277,705 287,495
Income taxes 540,124 2,821,776
Customer advances and unearned revenues 1,040,712 1,133,482
Other current liabilities 1,444,305 1,616,794
Total current liabilities 3,305,660 5,862,238
Long-term debt 300,931 300,770
Long-term liabilities 194,857 186,178
Deferred income taxes 325,219 266,130
Stockholders' equity 5,324,073 6,461,463
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $9,450,740 $13,076,779
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Trademarks
Oracle is a registered trademark of Oracle Corporation. Other names may be
trademarks of their respective owners.
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