Oracle quarterly profits down as costs rise

Software maker Oracle posted a lower quarterly profit as acquisition-related costs rose and revenue missed analyst estimates.

Software maker Oracle posted a lower quarterly profit as acquisition-related costs rose and revenue missed analyst estimates.

Second-quarter net income for the period ended November 30th fell to $798 million, or 15 cents per share, from $815 million, or 16 cents per share, from a year earlier.

Revenue rose 19 per cent to $3.29 billion. In the past two years, Oracle has spent some $19 billion buying up its rivals, such as PeopleSoft, Siebel Systems and others in a bid to lead consolidation in what the company sees as a maturing industry for business aimed at large companies.

Excluding one-time items, the company said it posted a per-share profit of 19 cents, up 16 per cent from 16 cents in the year-ago period. That was in line with the average Wall Street view of 19 cents, and revenue was pegged at $3.41 billion.

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Oracle said that net revenue of its database middleware new license revenue rose 5 per cent to $785 million, and net revenue of its applications software rose 24 per cent to $266 million. Net services revenue rose 26 per cent to $675 million.

Oracle stock has lost nearly 7 per cent since the beginning of the year.

Oracle shares trade at about 16 times its projected 2006 earnings per share, excluding items. Company shares dropped 44 cents, or 3.4 per cent, to $12.38 in after-hours trading once the quarterly results were reported.