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Oracle shares fell nearly 5 per cent in after-hours trading on Thursday after it announced new-licence revenues for its key database and middleware products were relatively flat in its first quarter.

Oracle said these revenues were up just 1 per cent to $492m to August 31, from $486m a year earlier. It blamed economic weakness in Europe along with its US market not performing as strongly as expected, with two major deals slipping into the second quarter.

Larry Ellison, chief executive, said there was also a tough comparison with a year ago, when database revenues grew 20 per cent. He insisted that the database business, responsible for around 80 per cent of Oracle’s earnings, was still growing at around 10 per cent, based on results from the past four quarters.

Oracle shares were trading 4.8 per cent lower at $12.87 after the market closed, in response to the announcement.

The company declared a profit of $738m or 14 cents a share, in line with the expectations of analysts polled by Thomson First Call and up 38 per cent on a year ago. The figure excluded acquisition expenses and other charges. Non-GAAP total sales of $2.91bn were below analyst forecasts of $2.94bn.

Oracle acquired PeopleSoft late last year, bought Retek, which specialises in the retail market, this year and announced the purchase of Siebel Systems this month for nearly $6bn.

PeopleSoft and Retek helped lift revenues in its business applications division by 84 per cent to $127m.

“This quarter delivered exceptionally strong applications performance driven by the successful integration of PeopleSoft,” said Greg Maffei, chief financial officer. “Cash flow and margins also reached record levels.”

Oracle said new-licence sales for its Fusion middleware grew 33 per cent in the quarter compared to 2 per cent growth for its main rival there, BEA.

“We think we will move ahead of BEA and challenge IBM for the number-one spot in middleware,” said Mr Ellison.

Services revenues were up 34 per cent at $637m.

Oracle said it was still on track to deliver earnings of 78 to 81 cents per share for the fiscal year but Mr Maffei declined to give a revenue forecast.

For the current quarter, he expected the Silicon Valley company to earn 19 cents per share on sales of $3.37bn to $3.46bn, representing growth of 22 to 26 per cent.

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