Dec. 16 (Bloomberg) -- Shares of Oracle Corp., the world's third-largest software maker, fell after sales of new database licenses missed analyst estimates for a second straight quarter.

Database license revenue rose 5 percent in the second quarter, compared with an estimate of 10 percent from UBS AG analyst Heather Bellini. Database growth also trailed a 24 percent gain at Oracle's smaller business-applications division, the Redwood City, California-based company said yesterday.

Chief Financial Officer Safra Catz yesterday said Microsoft Corp., which last month unveiled its new SQL Server, is a ``significant competitor'' in the $7.79 billion market. Oracle's database growth in the three months ended Nov. 30 followed a 2 percent increase in the first quarter, when the company blamed Microsoft for increased competition.

``It is a yellow light that either it's competition, therefore pricing, or that market growth is not as robust as it had been,'' said Chuck Jones, who helps manage $15 billion for Atlantic Trust Stein Roe in San Francisco, including Oracle shares.

The shares fell 14 cents to $12.69 at 4 p.m. New York time in Nasdaq Stock Market composite trading, after earlier dropping as much as 6.6 percent to $11.99. The stock was the most actively traded on U.S. exchanges. It has lost 7.5 percent this year.

Net income fell 2 percent to $798 million, or 15 cents a share, on costs related to Oracle's January purchase of PeopleSoft Inc. Sales rose 19 percent to $3.29 billion.

License Sales

Revenue from databases accounted for 75 percent of Oracle's new software orders in the second quarter. Sales of licenses for business-management applications used for tasks such as payroll and inventory rose as more PeopleSoft users renewed contracts.

The license revenue figures don't conform to generally accepted accounting principles because they include some sales from updates and product support for PeopleSoft users.

Oracle forecast profit of 19 cents, excluding some costs, on sales of $3.4 billion to $3.5 billion for the current quarter, the company's third. Total license revenue will increase 10 percent to 20 percent from $947 million a year ago, Oracle said.

Redmond, Washington-based Microsoft is seeking to win database orders from market leader International Business Machines Corp. and No. 2 ranked Oracle. Microsoft and IBM are bigger than Oracle in total software sales.

Last year, Oracle's database license sales grew at an average rate of 13 percent.

``When can we get back to that double-digit range?'' UBS's Bellini asked during Oracle's conference call with analysts yesterday. ``The database business didn't reaccelerate as fast as some had hoped from last quarter.''

New York-based Bellini is the No. 2 ranked software analyst according to Institutional Investor magazine.

To contact the reporter on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net.

Last Updated: December 16, 2005 16:07 EST