Oracle sales rise, but earnings disappoint
Shares slump as the software giant misses Wall Street expectations, but cloud transition gains steam
Oracle eased some concerns about its transition toward becoming more of a subscriptionbased cloud provider of business software when, on Tuesday, it reported better-than-expected fourth-quarter results.
However, an earnings forecast that fell shy of Wall Street’s expectations sent Oracle’s shares down by as much as 4 percent in after-hours trading.
After the stock market closed, Oracle said that it earned 99 cents a share, excluding one-time items, on $11.3 billion in revenue for the quarter that ended May 31.
During the same period a year ago, Oracle earned 89 cents a share, on sales of $10.9 billion.
Oracle’s results topped the estimates of Wall Street analysts, who had forecast the company to earn 94 cents a share on $11.18 billion in revenue.
Oracle continued to see more strength in sales for cloud services and license support, which rose by 8 percent from a year ago, to $6.8 billion.
However, Oracle continued a trend stemming from recent quarters as the company gave a forecast that disappointed investors.
Speaking on a conference call to discuss Oracle’s results, co-Chief Executive Safra Catz said that for its fiscal first quarter, the company expects to earn between 67 cents and 69 cents a share, excluding one-time items.
Wall Street analysts had earlier forecast Oracle to earn 72 cents a share for the quarter. Catz said that Oracle would see a negative impact from foreign exchange rates next quarter as it adopts a new accounting standard.
Rob Enderle, of technology research firm the Enderle Group, added that investors could be disappointed in Oracle’s sales growth during the recently completed quarter.
“I think the issue may be that revenue growth for the year is up 6 percent (to $39.8 billion), but for the quarter it was just up 3 percent,” Enderle said. “This is below average for the year, and typically sales spike in the fourth quarter. This suggests revenue growth is slowing, possibly by a lot, which likely made the market nervous.”