US disaster forces Ellison to reassess Oracle's future

NEWS Oracle CEO Larry Ellison said his business will suffer as a result of last week's terrorist attack in the US. During a conference call to analysts Ellison said that prior to Tuesday's attacks on the World Trade Center and the Pentagon he would have predicted revenues to continue at a flat rate into the next quarter. However, he today told analysts: "If it hadn't been for New York we'd have come to you with a better picture." He added he now anticipated things getting "slightly worse". Overall revenue is now expected to fall two per cent instead of the one per cent predicted originally, while new licence revenue could drop to as much as 15 per cent, from an original predicted decrease of between eight and 10 per cent Oracle reported profits of $510.65m, or nine cents a share, for the first financial quarter 2001, compared with $500.68m, or eight cents a share for the same period last year. Jeff Henley, CFO at Oracle, said: "It is very difficult to predict what will happen. There will be some negative impact as a result of last week but the question is how much." However, Henley predicted good news on the horizon for the US, claiming that both Oracle and the economy would stage a recovery in the second half of the year. CEO Ellison agreed that Oracle will be able to maintain profitability despite the downturn and was bullish with analysts that suggested otherwise. He claimed the company had already made a positive start to the year, citing several large contract wins, including the deployment of the Oracle ebusiness suite across Dell's global offices. Claims that the entire company had been heavily hit by the dot-com collapse were quickly dismissed. Ellison said: "The general business unit was down 45 per cent. But all the other database units were up - Asia Pacific, Japan, finance, industrial sector, government were all up. It [negative growth in the general business unit] was all caused by this one group and the disappearance of an industry." When questioned on reports of extensive job cuts, Ellison told analysts to check the numbers. "Spending is up in R&D. Our bonuses are down but have more people join and more spending. Headcount was up 14.1 per cent, so I don't know which figures you're reading," he said. Oracle announced its financial results last Thursday but delayed its conference call following the events of Tuesday.