Oracle net rises 4 percent but sales drop

SAN FRANCISCO -- Oracle Corp.'s profit rose 4 percent in the latest quarter, matching Wall Street's forecasts Wednesday, despite a drop in sales that revealed businesses are still being tightfisted about buying new software.

The sales figure was short of analysts' expectations, and Oracle's shares fell 3 percent.

The Redwood Shores, Calif.-based company's results, reported after the market closed, reflect a familiar pattern that has emerged during the recession.

Oracle's sales of new software licenses fell 17 percent to $1 billion, while revenue from updates and technical support contracts climbed 6 percent to $3.1 billion. While many businesses are still reluctant to pay for new software, existing Oracle customers usually pay the company to do the follow-up work on software they've already bought, which explains why the numbers sometimes go in different directions.

The rise in support work helped lift Oracle's net income for the June-August quarter to $1.12 billion, or 22 cents per share, versus $1.08 billion, or 21 cents per share, in the same quarter a year ago.

Excluding one-time items, profit was 30 cents per share, matching the average estimate of analysts polled by Thomson Reuters.

Sales fell 5 percent to $5.05 billion, short of expectations for $5.25 billion.

The stock fell 71 cents, or 3.2 percent, to $21.42 in after-hours trading, likely on disappointment about the revenue shortfall. Shares had closed down 53 cents at $22.13 during the regular session.