Oracle has posted strong year-end financial results - and at the same time cut 325 jobs in what it said was a move to a more efficient electronic commerce method of operating.
"This is part of our plan to evolve into an e-business company," said Jennifer Glass, a company spokeswoman. "We want to achieve business efficiency that will reduce the need for a variety of jobs."
The move came as the company reported that year-end net income increased 35 percent to US$1.3 billion, or 87 cents per share, compared to net income of $955 million, or 64 cents per share, for fiscal year 1998, excluding one-time charges.
Oracle reported that revenue for the year ending May 31 grew 24 percent to $8.8 billion compared to $7.1 billion in revenue last year.
For the fourth quarter, Oracle showed a 31 percent increase in net income to $527 million, or 36 cents per share, compared with net income of $403 million, or 27 cents per share, in the same period last year.
The quarterly earnings beat Wall Street expectations. A median estimate of 30 analysts polled by First Call predicted Oracle would report fourth-quarter earnings of 32 cents per share.
Strong demand for Oracle products that help businesses move to Internet operations and streamlining within the company led to revenue gains, Oracle founder and Chief Executive Officer Larry Ellison said in a teleconference.
"We caught the Internet trend early," Ellison said.
Overall, Oracle's fourth-quarter software sales revenue grew 22% for the year. Specifically, database software sales increased 25 percent, application software sales rose 28%, and services revenue rose 22 percent.
The results were surprisingly good in light of concerns about possible year 2000-related computer problems, which might have led systems managers to forego buying database software, said Lou Mazzucchelli, an industry analyst with the investment bank Gerard Klauer Mattison & Co. "They looked good across the board," he said.
The bulk of the job cuts will affect Oracle workers in the United States, Glass said. Oracle employs about 8,000 people at its Redwood Shores headquarters, about 16,000 workers nationwide and 43,000 workers worldwide, Glass said.
On the Nasdaq Stock Exchange, Oracle stock closed today at $25.125, down 1.3 points for a 4.96% decrease.
Oracle, located at Redwood Shores, California, can be reached at +1-650-506-700 or at http://www.oracle.com/.