FOOL CONFERENCE CALL SYNOPSIS*
By Greg Markus (TMF Boring)

Oracle Corp.
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500 Oracle Parkway
Redwood Shores, CA 94065
(415) 506-4073
http://www.oracle.com

ANN ARBOR, Mich. (March 12, 1998) /FOOLWIRE/ -- Oracle Corp. today reported results for its fiscal third quarter ended Feb. 28, 1998. Revenues increased 27% (33% in local currencies) to $1,749 million from $1,373 million in the same period last year. Net income for the period was $215 million, or $0.22 per share (diluted), compared to net income of $193 million, or $0.19 per share (diluted), in the same period of fiscal 1997 (excluding the one-time $37 million charge related to the Datalogix acquisition).

NINE MONTH RESULTS. For the first nine months of fiscal 1998, revenues increased 27% to $4,731 million from $3,736 million in the same period last year. Net income for the nine-month period was $552 million, or $0.55 per share, compared to net income of $485 million, or $0.48 per share, excluding one-time charges related to acquisitions in fiscal 1997 and fiscal 1998.

REVENUES DETAILS. In the fiscal third quarter, worldwide "licenses and other" revenue grew 14% (19% in local currencies) over the same period last year, to $774 million, showing a healthy rebound from the previous quarter. Services revenue increased 41% to $974 million.

GEOGRAPHIC BREAKDOWN. The Americas reported total revenue growth of 43% for the quarter. EMEA (Europe, Middle East and Africa) revenue increased 21%. Asia Pacific revenues declined 12%, reflecting the continuing negative impact of foreign exchange rates; in local currencies, Asia Pacific revenues increased 3% over last year. "Licenses and other" revenues increased 34% in the Americas region and 10% in EMEA, but declined 25% in Asia Pacific.

PLATFORM BREAKDOWN. UNIX revenues increased 2%. Revenues for Windows platforms increased 66%; revenues for the Windows NT component of that total grew 130%.

OTHER DETAILS. Total headcount continued the trend of slowing growth, up 23% year-over-year. Days sales outstanding (DSO) was 68 days versus 78 days a year ago. The company continues to work on reducing business expense and improving profit margins.

TOOLS BUSINESS. Oracle's software tools business showed improvement, increasing 25% in the Americas. Management believes that the improvement will continue as new versions of tools products are offered this year.

VERTICALS. Examples of Oracle's "Verticals" products and services customers include the following: in the consumer products sector, Dial, PepsiCo, and Frito-Lay; in energy, Conoco, Sun, and Tosco; in telcos, Bell South and Ameritech; in financial services, Wachovia Bank, Norwest, Mellon; in the industrial sector, Dell Computer, Silicon Graphics, Ingersoll-Rand, Cummins.

APPLICATIONS BUSINESS. The debut of Release 11.0 next month should provide a lift to the company's applications sales. Release 11.0 will be offered in its NCA [Network Computing Architecture] version first and after that in a client-server version. Initial customer reaction to the NCA version has been very favorable. Oracle intends to demonstrate further the advantages of the NCA-based approach. Management said that Oracle's applications business in Europe has been hampered to date because the company had been "very slow in delivering European functionality" for countries outside of the U.K. and some Northern European countries that can use the U.S. product with modest localization. In places such as France, Germany, and Italy, for example, some of Oracle's applications don't have the functionality of SAP's products. Release 11.0, which is perhaps three months away for Europe, should improve the situation for Oracle considerably.

SALES TO TELCOS. Management said they had expected applications sales growth to telephone companies to have been a little higher than it was in the quarter. Basically, every major telco in the world has standardized on Oracle's server platform, which limits further growth in core database sales; but there's still room for growth in the applications business.

YEAR 2000. Larger enterprises in the U.S. and much of Europe have largely already addressed the Year 2000 issue. Although there is no way to know for sure, it's possible that Y2K could spur sales to low- and mid-market companies that are only now formulating and implementing their Y2K plans.

UPCOMING EVENTS. The Analysts' Day event will be held on April 2 in San Francisco. An Oracle users group conference is coming up in a couple of weeks.

GUIDANCE. Management projects that the negative currency impact will continue, although the possibility exists that it could be somewhat less severe -- perhaps a 4 percentage-point negative effect as compared with the 6-point effect seen in recent quarters. Management intends to continue to focus on recovering the company's profit margins to those experienced in fiscal 1997, but this will be a gradual process. Oracle's president and CEO Ray Lane said, "Although we believe the situation in Asia Pacific will continue to negatively effect results for some time, Oracle's performance in the Americas and EMEA shows that the primary issues surrounding sales force reorganization are behind us."

* A Fool conference call synopsis represents an effort to highlight the salient points of a conference call and should not be taken as an authoritative accounting or transcription of the entire event. Note: Statements made by a company other than historical information may constitute forward-looking statements for which the company can claim protection under the Safe Harbor Act. Please consult the company's filings with the SEC for information on risk factors which might cause actual results to differ materially from the information contained in these forward-looking statements.