Oracle's latest quarterly financial results have been on target, but some analysts still worry that the good showing masks a slowdown in sales.

Although the company reported another strong financial quarter on Monday, posting $4.2 billion in revenue for the second quarter of fiscal 2007, there are signs that the company's growth spurt could be coming to a halt.

Analysts were keeping a keen eye on software license revenue during the quarter, and results show that their concern that Oracle's revenue surge is the result of acquisitions, and not strength in its own core software business, could be valid.

”This was a miss. The company fell short of its new license guidance,'' J.P. Morgan analyst Adam Holt was quoted as saying by third-party sources.

Oracle's software revenue, which was $3.21 billion, grew 19 percent year over year, coming in on the low end of the company's growth expectations of 19 percent to 21 percent. Moreover, new software licence revenue for the quarter was $1.21 billion, an increase of only 14 percent over the same period last year when the company had predicted an increase of 15 percent to 20 percent.

Software licence update and product support revenue came in stronger, at $2.01 billion, an increase of 25 percent over the same period last year. Still, analysts likely will see Oracle's software licence revenue results as a sign of weakness for the vendor.

In a statement, Oracle maintained its customary bravado, attributing its results to strong sales in all three of its core software areas - applications, middleware and database. A statement from Oracle President Charles Phillips on second quarter results made claims that Oracle continues to steal market share from rivals in these areas.

Oracle President and chief financial officer Safra Catz acknowledged that Oracle missed its objective for software revenue growth in the quarter. She attributed this misstep to the company failing to execute on key deals that should have closed in the quarter but did not.

She said to alleviate the execution problem going forward, Oracle will focus on letting sales-people work in the field rather than spend time engaged in sales meetings and other activities that don't lend themselves to deal-closing. "We think additional focus ... and better pipeline management should mean better results," Catz said.

Overall, executives on the call seemed to have a lot of faith in Oracle's backlog of unfinished sales deals, which Catz said is very big, to contribute to Oracle's success in the remainder of 2007.

Larry Ellison, Oracle's chief executive officer, noted that a good portion of the deals in the pipeline are wins in vertical markets where Oracle has not traditionally played. He said retail has been a key growth area for the company, claiming that eight of the 10 largest retailers in North America now use Oracle's retail applications, whereas only one uses rival SAP AG's.

In fact, Ellison said growth in the retail sector will begin to have a noticeable effect on Oracle's software revenue. "Retail will actually move the needle," he said.

Ellison also said Oracle plans to continue its "dual strategy" of growing the company through both internal development and acquisition, a comment that may hint the company is eyeing more purchases to build out its massive software and applications portfolio.

"This was a quarter where they fell short, but I don't think the year is going to be as bad as this quarter was." Goldman Sachs analyst Richard Sherlund was quoted as saying.