The cautious outlook came as the group reported a 33% fall in earnings for the current quarter, below analysts' expectations.

The company said its performance overseas was worse than in the US, with Europe deteriorating just as America appeared to be recovering.

Oracle said these trends made it difficult to predict when its results would improve and that further job cuts were likely.

'Disappointed'

Oracle, one of the world's largest software groups, reported earnings of $342.7m in its latest quarter, or 6 cents per share.

The company said had it not been for losses in its investments in other companies, it would have reported earnings of 7 cents per share - more in line with analysts' estimates.

Sales of new software slipped by 23%, which chief financial officer Jeff Henley admitted was a blow.

"We are very disappointed," said Mr Henley.

The group has already cut around 600 jobs between May and September to try and offset some of the losses.

But Mr Henley said hundreds more jobs may have to go by December.

Cautious outlook

Chief executive Larry Ellison sounded an optimistic note by suggesting the group had considerably increased its market share in recent months.

Mr Ellison quoted from a recent AMR survey and said "Oracle's database share under enterprise applications has increased to 12% , while Microsoft's increased by 4% and IBM's decreased by 27%".

However, Mr Henley said the company continued to be "very cautious" in its business plan, assuming a small degree of recovery in the remaining quarters of the year.

Oracle posted its results after the market close. But investors were already anticipating some bad news, with shares down 25 cents to close at $9.03.