Oracle Corp., the world's second-largest software vendor, on Monday announced fourth-quarter results that beat lowered estimates and said its business may have bottomed out during the crucial period. 

As it shares rallied in after-hours trade on the news, Chief Executive Larry Ellison said when the economy recovered the company could see a return to the fast growth of the past. 

``We think, we hope that the worst is over. Hopefully we hit the bottom in our fiscal Q4,'' said Jeff Henley, Oracle's chief financial officer, who forecast that software license revenue would be flat in the current quarter to August 31. 

Sales were weaker than expected at $3.26 billion in the past quarter, but Oracle cut costs sharply to hit its target of net earnings of 15 cents per share, slightly better than the Wall Street consensus of 14 cents per share. 

Given all of the investor uncertainty that had surrounded the quarter, typically the most important for Oracle, the results were strong enough to spur an after-hours rally that pushed the stock to $16.10 from their closing price of $14.84. 

Oracle forecast earnings per share of 8 cents in the first-quarter, which would be flat from a year earlier, but Ellison hinted that was setting the bar low. 

``Barring any further decline in the economy, we think our sales will pick up...We're cautiously optimistic that we might beat those numbers,'' Ellison told Reuters Television. 

COULD HAVE BEEN WORSE 

Oracle's fourth quarter net income fell 8 percent from a year ago as the Redwood Shores, California-based company fell victim to a corporate spending slowdown. Sales dropped to $3.26 billion from $3.37 billion a year ago, short of analysts' consensus forecast for $3.4 billion. 

Analysts said that the good news in the results was that they were simply not worse given diminished expectations, a positive sign for the battered information technology sector. 

``I'd describe this as a 'waiting-to-exhale' quarter,' and people were bracing for something worse,'' said Morgan Stanley Dean Witter analyst Charles Phillips. ``It's an important data point for the sector, because if Oracle hadn't come through, it could have spilled over to other stocks as well.'' 

The software titan saw license revenue -- which is broken into database and applications software sales -- decline 10 percent during the fourth quarter ended May 31. 

Oracle's mainstay database business -- which kicked in about 80 percent of the company fiscal 2001 revenue -- dipped 1 percent to $2.4 billion, pressured by the economy and increasing competition from International Business Machines Corp. and Microsoft Corp. 

Ellison said that key business would eventually reclaim traditional growth rates of between 15 and 20 percent and added that Oracle's recently released 9i database would contribute to first-quarter revenues. 

Weak Link Applications 

The company's applications business -- which includes sales of the e-business software suite that it has touted as a key driver of future growth -- was the weak link in the past quarter, with sales slipping 9 percent to about $840,000. 

``I see no reason why we can't get back to 50 to 100 percent growth in the applications business,'' said Ellison, who noted that corporate giants, such as General Electric Co. and Hewlett-Packard Co. had installed the company's e-business software that automates customer service, accounting and human resources functions. 

Oracle faces stiff competition in the space from companies such as Siebel Systems Inc., SAP AG and PeopleSoft Corp. 

``Oracle doesn't seem to be making a tremendous amount of progress against those other players,'' U.S. Bancorp Piper Jaffray analyst Jon Ekoniak said, noting that Oracle's applications fell 40 percent in the U.S. during the fourth quarter. 

``It was a lot worse on the applications side than anyone would have reasonably guessed,'' said analyst Bob Austrian of Banc of America Securities. ``In cost control, though, they were champs.'' 

Ellison said the company ``cut heads and cut costs'' to hit its target for flat per-share earnings in the fourth quarter. 

``We can continue to cut expenses, we think there's still fat in this company,'' he said. 

Oracle reported fourth-quarter net income of $855 million, down from $925.9 million. The year-ago profits were reported on an adjusted basis, stripping out profits from the sale of shares in Oracle Japan.