Oracle CFO: Market Hit Bottom Last QuarterOracle CFO: Market Hit Bottom Last Quarter

Oracle executives think the worst is behind them. Good thing, because the company last week reported an 11% drop in sales from a year ago, including a 27% plunge in software license revenue. Profit also dropped, down 11.8% to $549.5 million.

Oracle (ORCL--Nasdaq) still expects license revenue to be down year over year in the third quarter, but not as badly--more like 15% to 19% less--and flat in the spring. "Our assumption is that we hit the bottom in the second quarter," CFO Jeff Henley says. Oracle's sales dropped to $2.36 billion for its second quarter ended Nov. 30, and license revenue fell to $819.3 million. Service revenue was flat at $1.54 billion. Database license revenue was down 21%, while application revenue plunged 42%. CEO Larry Ellison calls the second quarter "our toughest quarter in a decade," but notes that the company's 35% operating margin is down just one point from a year ago and slightly higher than last quarter. Combined with a new release of the Oracle database that began shipping in June and new application server software due to ship early next year, Ellison predicts strong growth once the economy improves.