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Financial News Details

Oracle Delivers Record Profits in Q1 Earnings per Share 9 Cents; Operating Margin Up 13%

September 17, 2001

Oracle Delivers Record Profits in Q1

Earnings Per Share 9 Cents; Operating Margin Up 13%
World's largest steel company running entire business on E-Business Suite
Eighteen-month project is expected to save Billions of Dollars

REDWOOD SHORES, Calif. 17-SEP-2001 01:00 AM Last Thursday, Oracle Corporation announced record first quarter income of $511 million on revenue of $2.2 billion. Earnings per share increased to $0.09 compared with $0.08 in Q1 last year. First quarter operating margins increased from 29% last year to 33% this year. New software license sales were down 8%, while software license renewals plus product support services were up 9%. Consulting was down 4%, and education was down 1%.

"Given the weak economy, we're pretty happy with our results this quarter," said Oracle CFO, Jeff Henley. "Last year, sales to Internet companies were booming. That boom is over and those sales have largely disappeared; yet our revenue was down only 1%, and we managed to deliver record profits by improving our margins. Our continuing margin improvement has come from using our E-Business Suite to automate more-and-more of our business processes, enabling us to run our business with fewer-and-fewer people. The cost savings have been huge."

"Just as important," Henley continued, "we now have instant access to the information we need to monitor changes in demand for our products. We can see up-to-the-minute information on every lead, every opportunity, and every forecast from every salesperson in every country around the world."

"Our management team has demonstrated that it's possible to use technology to preserve profitability during difficult and uncertain times," said Larry Ellison, Oracle Founder and CEO. In good times we used the E-Business Suite to increase our profits by a billion dollars. In tough times our applications have enabled us to protect those profits. We are not alone. More and more of the world's best managed and most profitable businesses are choosing Oracle applications."

"For example, the world's largest and most profitable steel company, POSCO, is now running its entire global business using our E-Business Suite. In an eighteen-month project, POSCO implemented our CRM and ERP applications without modification. For a large company this is a very rapid implementation, and it's delivering rapid and sizable returns. Projected savings is measured in the billions of dollars. Today, POSCO is one of more than 750 companies that are running their businesses on the E-Business Suite."

"The world's second largest and most profitable PC company, Dell Computer, selected the E-Business Suite, both CRM and ERP, to further improve their already efficient and well- managed business. In addition to Dell, we had other major applications wins in the quarter. More than 3,500 companies are now in the process of implementing the E-business Suite."

Oracle Corporation is the world's second largest software company. With annual sales of $10.8 billion, Oracle provides the software that powers the Internet. For more information about Oracle, including supplemental financial information, please call Investor Relations at (650) 506-4073 or visit Oracle on the web at http://www.oracle.com.

"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995: Information in this release relating to Oracle's future prospects which are "forward-looking statements" are subject to certain risks and uncertainties that could cause actual results to differ materially, including, but not necessarily limited to, the following: (1) Management's ability to manage growth, continuously hire and retain significant numbers of qualified employees, forecast revenues and control expenses, especially on a quarterly basis, continues to be a challenge. The economic, political and other uncertainties caused (or exacerbated) by recent terrorist attacks upon the United States add to this challenge. An unexpected decline in the growth rate of revenues without a corresponding and timely slowdown in expense growth could have a material adverse effect on results of operations. (2) The market for Oracle's products is intensely competitive and is characterized by rapid technological advances and frequent new product introductions. There can be no assurances that Oracle will continue to introduce new products and new versions of existing products that keep pace with technological developments, satisfy increasingly sophisticated customer requirements and achieve market acceptance. (3) Oracle has recently made changes to its pricing model which could lead to a decline or delay in sales as its sales force and customers adjust to the new pricing policies. Intense competition in the various markets in which Oracle competes may also put pressure on Oracle to reduce prices on certain products. (4) Delays in product delivery or closing of sales can cause quarterly revenues and income to fall significantly short of anticipated levels. (5) Oracle is introducing new products, such as internet procurement and supply chain management software, customer relationship management applications and application hosting services, as well as assisting its customers in forming exchanges for a number of business procurement needs; the market acceptance and contribution to Oracle's revenues of these products and exchanges cannot be assured. Oracle undertakes no obligation to update information contained in this release. For further information regarding risks and uncertainties associated with Oracle's business, please refer to the "Risk Factors" section of Oracle Corporation's SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting Oracle Corporation's Investor Relations Department at (650)506-4073 or Oracle's Investor Relations website at http://www.oracle.com.

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