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Oracle reports falling profits due to massive acquisition costs

The world’s third largest software company Oracle has been on a buying spree since the last couple of months. Oracle has big plans to continue its domination in the database market and is also targeting the service applications market. The high cost of these acquisitions shows an impression on their bottom line as the company has reported that their second-quarter profit declined 2 percent.

The company’s net income also took a minor beating as it reached $798 million, or 15 cents a share compared to $815 million, or 16 cents, a year ago. However, if the costs of the acquisition are removed from this figure, Oracle does perform admirably and matches the market expectations of earnings of 19 cents a share.

Oracle also reported that their sales rose 19 percent to $3.29 billion. The company is struggling to survive in the market, which is getting more and more price conscious. Microsoft is playing the low price card and Oracle has to cope up with that added pressure. Oracle still relies around 80% on the sales of there database products.

Chief Executive Officer Larry Ellison is working hard on lessening this reliance by getting other businesses to grow even further and most of these new acquisitions are to help that process. Microsoft recently launched the new version of Microsoft’s SQL Server database, which has also led to delays from companies to make a decision about their purchases of database solutions.



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