Oracle Falls After SAP Says Global Crisis Hurt Sales (Update1)

Oracle Corp., the world's second- largest software maker, fell in Nasdaq trading after rival SAP AG warned its sales growth will trail forecasts as customers put orders on hold amid the global financial crisis.

Oracle dropped $1.18, or 6.1 percent, to $18.30 at 4 p.m. New York time on the Nasdaq Stock Market. The shares have declined 19 percent this year.

SAP tumbled 16 percent in Frankfurt trading after saying a ``very sudden and unexpected drop in business activity'' will lead to lower-than-anticipated earnings this quarter. Last month, Oracle forecast profit that beat analysts' estimates, reassuring investors a worsening economy wasn't eroding profit.

"SAP's miss today is causing some investors to worry the economy may catch up with Oracle'' this quarter, said Pat Walravens, an analyst with JMP Securities in San Francisco.

Oracle Chief Executive Officer Larry Ellison has spent more than $34.5 billion on acquisitions since 2005 to add customers who buy maintenance contracts, relying on those support fees to preserve profit as technology spending slows. Such fees account for more than half of sales.

Deborah Hellinger, a spokeswoman for Oracle, didn't respond to an e-mail and phone call seeking comment today. The Redwood City, California-based company said Sept. 18 that second-quarter profit will climb to as much as 36 cents a share, excluding some costs. Analysts in a Bloomberg survey at the time estimated 35 cents on average for the period, which ends Nov. 30.

SAP is based in Walldorf, Germany.

To contact the reporter on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net

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