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Oracle (Nasdaq: ORCL) boosted earnings in its first quarter, with net income rising 28 percent to US$440 million, but did so largely as a result of internal cost controls put in place during 2002, when the company had some of the most difficult quarters in its history. Revenues in the latest quarter barely increased, up just 2 percent to $2.07 billion, while new license sales actually fell 7 percent year over year, to $525 million.
The results are potentially troubling because Oracle has easy quarterly comparisons to make. 2002 saw the company hit a low-water mark in terms of both revenue and performance, according to Morningstar analyst Mike Trigg.
"They had bottomed out, so the comparisons aren't robust ones," Trigg told the E-Commerce Times. "At the same time, the fact they've made some internal corrections might help them outperform expectations if business improves in the new few quarters."
Unsurprisingly, the company put a positive spin on its relatively lackluster performance.
"Once again, the quarter showed positive growth in total revenues, and we expect to see continued improvement in total revenue and new license growth in the second quarter, led by North America," Oracle CFO Jeff Henley said in a statement.
Dark Lining
Shares of Oracle fell 7 percent in early trading Friday, just after the news hit, to $12.14. Oracle stock has had an up-and-down week overall. The tech bellwether's weeklong OracleWorld conference gave it a chance to highlight its next wave of products, even as concern grew that Oracle's planned takeover of PeopleSoft could remain bogged down for the foreseeable future.
Apparently anticipating the concern about licensing revenue, Oracle issued a statement citing what it called "significant customer 
wins" during the quarter, listing dozens of corporations, government agencies and educational institutions that bought its E-Business Suite during the previous three months.
In addition, Oracle said it has sold some 500 deployments of its Collaboration Suite since it was launched about a year ago, with Air France, Euro Bank and the city of Memphis, Tennessee, among its customer wins.
The company also said software updates and paid support grew 14 percent, rising to just over $1 billion.
Happy Face
While Oracle declined to state specific targets for the rest of the year, it did provide a somewhat upbeat outlook, saying sales in North America will help lead to stronger revenue gains.
"We believe everything is in place for a better year," CFO Henley said in a conference call.
Oracle also used the conference call with analysts to reiterate its intention to follow through with the planned PeopleSoft purchase, saying it remains "committed" to closing the deal .
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