Has Oracle Chairman Lawrence Ellison taken his eye off the ball? While Ellison is promoting his vision of a network PC on every desk, Oracle's core software business is hitting a rough patch. Second-quarter earnings of $187 million on revenues of $1.6 billion, announced on Dec. 9, missed analysts' estimates by 17%. Worse, Oracle eked out revenue growth of 3% in its database business and 7% in corporate applications--which grew by 96% a quarter earlier. Oracle stock fell 29% on the news, to 22 15/16.
Other factors in Oracle's performance include a shortfall in Asian sales, analysts say. Also, Oracle suffered from a difficult sales-force reorganization and a decline in sales to telecommunications companies, a key market.
It's no wonder Chief Financial Officer Jeffrey Henley sounds embarrassed. "Usually, our forecasts are reasonably close," he says. "But this time, every geography in the world missed their numbers." Could be time for Ellison, now $2.14 billion poorer on paper, to pay attention to the database business that made him a billionaire.