Computing customer margin

The Redwood City,California-based company on Sept. 18 gave a weaker-than-projected profit forecast for the fiscal second quarter,which ends in November. Sales are also slowing - they were unchanged last year and analysts on average predict 3 percent growth this year,according to data compiled by Bloomberg. Revenue increased by double digits for much of the past decade.

“On the applications side,they need to demonstrate they can keep pace with the upstarts, ” said Israel Hernandez,an analyst at MKM Partners LLC who recommends buying Oracle shares.

Oracle’s compensation policies have also come under some scrutiny. CtW Investment Group,part of the labor group Change to Win,is urging Oracle to appoint a new director to oversee compensation practices. The group is also opposing the use of stock options to pay Ellison and other executives,said Michael Pryce-Jones,a research analyst at CtW,which holds 6 million Oracle shares.

In a letter sent this week to Bruce Chizen,the chairman of Oracle’s compensation committee and the former CEO of Adobe Systems Inc. (ADBE),CtW also urged Oracle to adopt industry pay benchmarks. Oracle plans to hold its annual shareholder meeting on Oct. 31.

Ellison’s pay package declined 18 percent to $78.4 million for fiscal 2013 after he gave up an annual bonus and the company missed some of its profit targets.

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