Skip to main content

Oracle's software sales disappoint, stock plummets

Oracle Corp missed expectations for software sales and subscriptions for the second straight quarter, sending its shares plunging as investors worried CEO Larry Ellison may have trouble getting the technology giant back on track.

On Thursday, Oracle executives forecast that new software sales and subscriptions will rise 0 percent to 8 percent this quarter and blamed weakness in the past quarter on disappointing sales in Asia and Latin America.

Oracle, which is trying to fend off Salesforce.com and other increasingly aggressive rivals focused on providing software over the cloud or Internet, plans to move its stock listing to the New York Stock Exchange in July from the Nasdaq, a major win for the older bourse.

Executives said the move was in shareholders' best interests, without elaborating. Oracle also said it would double its quarterly dividend to 12 cents a share.

"Organic growth is slowing and the company has a lot of pressures it has to deal with. They're late to the cloud and playing catch-up," said Mark Moerdler, an analyst at Bernstein. "Doubling the dividend - they're trying to deliver a message that their ability to deliver significantly more cash to investors is going to continue."

 

Overall, Oracle's revenue stood unchanged at $10.9 billion in the period, the company's fiscal fourth quarter, ended May 31. That missed the $11.122 billion analysts had expected on average, according to Thomson Reuters I/B/E/S.

More closely watched revenue from new software sales and Internet-based software subscriptions rose 1 percent to $4 billion, short of an average forecast of about $4.2 billion, according to FBR Capital analyst Daniel Ives.

Shares of the software company fell more than 8 percent to $30.46 after hours, after closing down 2.6 percent at $33.21 on the Nasdaq.

"This is just really bad," said Kim Forrest, a senior analyst with Fort Pitt Capital Group. "I don't really trust after-hour trading to accurately reflect what the stock will do the next day. But it shows you how frustrated shareholders are right now."

Most analysts recommend buying shares of Oracle, according to StarMine Professional, with many expecting a pickup in performance as the global economy improves and corporate customers become more willing to spend on IT.

Others say the 36-year-old tech company's era of fast growth and lofty margins, when it could dictate prices because of its premier market position, may be waning.

Smaller, aggressive companies are offering competitive products at prices that often undercut Oracle, whose strategy is to integrate cloud software with its own hardware for greater efficiency.

BY THE NUMBERS

Investors scrutinize new software sales because they generate high-margin, long-term maintenance contracts and are an important indicator of future profit. The company had forecast a 1 percent to 11 percent rise in new software license and cloud subscription revenue for its fiscal fourth quarter.

Ellison blamed Oracle's performance on the poor global economic environment. "It was clearly an economic issue, not a product, competitive issue," he told analysts on a conference call.

Chief Financial Officer Safra Catz said deals Oracle missed in the fourth quarter did not go to competitors, but instead were put off or shrank from their original sizes. She previously blamed Oracle's rapidly expanding salesforce for a severe miss in software sales in the third quarter.

_0">

Net profit for the fourth quarter rose 10 percent to $3.8 billion, or 80 cents per share. On an adjusted basis, Oracle earned 87 cents per share.

_1">

Revenue from Oracle's hardware division, which it acquired through the $5.6 billion purchase of Sun Microsystems in 2010, fell 13 percent to $849 million.

_2">

Oracle had forecast that hardware product revenue for the May quarter would fall between 12 percent and 22 percent.

_3">

The division's revenue has fallen every quarter since Oracle closed the Sun deal, but Ellison said in December he expected hardware systems revenue to start growing in the May quarter.

_4">

(Reporting by Noel Randewich; Editing by Steve Orlofsky and Phil Berlowitz)

_5">

Popular posts from this blog

Study Abroad USA, College of Charleston, Popular Courses, Alumni

Thinking for Study Abroad USA. School of Charleston, the wonderful grounds is situated in the actual middle of a verifiable city - Charleston. Get snatched up by the wonderful and customary engineering, beautiful pathways, or look at the advanced steel and glass building which houses the School of Business. The grounds additionally gives students simple admittance to a few major tech organizations like Amazon's CreateSpace, Google, TwitPic, and so on. The school offers students nearby as well as off-grounds convenience going from completely outfitted home lobbies to memorable homes. It is prepared to offer different types of assistance and facilities like clubs, associations, sporting exercises, support administrations, etc. To put it plainly, the school grounds is rising with energy and there will never be a dull second for students at the College of Charleston. Concentrate on Abroad USA is improving and remunerating for your future. The energetic grounds likewise houses various

Best MBA Online Colleges in the USA

“Opportunities never open, instead we create them for us”. Beginning with this amazing saying, let’s unbox today’s knowledge. Love Business and marketing? Want to make a high-paid career in business administration? Well, if yes, then mate, we have got you something amazing to do!   We all imagine an effortless future with a cozy house and a laptop. Well, well! You can make this happen. Today, with this guide, we will be exploring some of the top-notch online MBA universities and institutes in the USA. Let’s get started! Why learn Online MBA from the USA? Access to More Options This online era has given a second chance to children who want to reflect on their careers while managing their hectic schedules. In this, the internet has played a very crucial in rejuvenating schools, institutes, and colleges to give the best education to students across the globe. Graduating with Less Debt Regular classes from high reputed institutes often charge heavy tuition fees. However onl

Sickening moment maskless 'Karen' COUGHS in the face of grocery store customer, then claims she doesn't have to wear a mask because she 'isn't sick'

A woman was captured on camera following a customer through a supermarket as she coughs on her after claiming she does not need a mask because she is not sick.  Video of the incident, which has garnered hundreds of thousands of views on Twitter alone, allegedly took place in a Su per Saver in Lincoln, Nebraska according to Twitter user @davenewworld_2. In it, an unidentified woman was captured dramatically coughing as she smiles saying 'Excuse me! I'm coming through' in the direction of the customer recording her. Scroll down for video An unidentified woman was captured dramatically coughing as she smiles saying 'Excuse me! I'm coming through' in the direction of a woman recording her A woman was captured on camera following a customer as she coughs on her in a supermarket without a mask on claiming she does not need one because she is not sick @chaiteabugz #karen #covid #karens #karensgonewild #karensalert #masks we were just wearing a mask at the store. ¿ o