LATEST NEWS

Oracle quarterly results disappoint Wall Street; shares fall

RELATED QUOTES

SymbolPriceChange
CRM76.16+0.13
MSFT62.96+0.22

By Noel Randewich

SAN FRANCISCO (Reuters) - Oracle Corp(ORCL.N) posted higher third-quarter revenue and profit that failed to satisfy investors looking for signs of a sustained turnaround and its shares fell about 4 percent.

Shareholders had grown more optimistic after Oracle's previous quarterly results, but still worried about slow IT spending and growing competition from smaller, nimble rivals.

On Tuesday, the company also forecast current-quarter results roughly in line with investors' targets.

Chief Financial Officer Safra Catz forecast fourth-quarter revenue growth of between 3 percent and 7 percent in constant dollars, equivalent to between $11.3 billion and $11.7 billion. Wall Street had expected $11.5 billion.

She told analysts on a conference call that she expected current quarter earnings of 92 cents to 99 cents per share, versus analysts' consensus estimate of about 96 cents. New software and sales and subscriptions should grow between zero and 10 percent, she said.

"They still have heavy lifting ahead in order to declare this a turnaround story," said Dan Ives, an analyst with FBR. "Investors need to see more. It continues to be a 'prove me' stock in the eyes of investors."

The company said new software sales and Internet-based software subscriptions in its fiscal third quarter ended February 28 rose 4 percent from the year-ago period.

The company had forecast that new software sales and subscriptions would be up between 2 percent and 12 percent in the current quarter. New software sales are scrutinized by investors because they generate high-margin, long-term maintenance contracts and are an important indicator of future profit.

SOFTWARE BUSINESS STILL WEAK

Revenue from Oracle's hardware systems products grew 8 percent to $725 million, the first increase since the software company's $5.6 billion purchase of Sun Microsystems in 2010.

The hardware business recovery is a good sign but much less important than the company's core software business, said Ives.

Smaller, aggressive companies like Salesforce.com Inc (NYS:CRM - News) and Workday Inc (WDAY.N) have been offering competitive software and Internet-based products at prices that often undercut Oracle.

In response, four-decade-old Oracle has been rolling out its own cloud-based products and acquiring smaller cloud companies like marketing software maker Responsys Inc.

"They moved in this direction significantly later than Microsoft (NSQ:MSFT - News) for example," said Bernstein analyst Mark Moerdler. "They're playing catch up, but they're working quickly and they're starting to make some progress."

On Tuesday's call, Catz said revenue from cloud software subscriptions was up by about 24 percent in the quarter to $292 million, equivalent to about 3 percent of Oracle's total revenue.

On the conference call, President Mark Hurd said Oracle is getting better at selling cloud services, thanks partly to a reorganization of the company's salesforce last year.

"We thought we knew a lot a year ago or a couple years ago. We just know a lot more now," Hurd said. "We obviously have more feet on the street than we had and ... they've been in place longer."

Cloud computing, which refers to the delivery of services via the Internet from remote data centers, is becoming popular with corporate buyers because it is faster to implement and has lower upfront costs than traditional software.

Most of Oracle's business relies on selling database software and hardware that customers install in their own data centers. Customers pay extra maintenance contracts that are highly profitable to Oracle and provide a steady stream of cash.

Global IT spending is likely to increase just 3 percent this year, while spending on cloud services is expected to grow 18 percent, according to market research firm Gartner.

For the third quarter, Oracle said overall revenue rose 4 percent to $9.31 billion. That was a little below the $9.36 billion analysts had expected on average.

Net income was $2.56 billion, up 2 percent. Earnings per share, which reflected a decrease in the number of shares outstanding, rose 8 percent to 56 cents. On an adjusted basis, Oracle earned 68 cents per share.

Shares of Oracle fell 4 percent to $37.32 in extended trade, after closing at $38.84 on the New York Stock Exchange.

(Reporting by Noel Randewich; Editing by Leslie Adler, Cynthia Osterman and Richard Chang)

--

Get stories like this on the Yahoo app and discover more every day.
Download it now.
  • Mistry replies on Tata Sons' 'counter-allegations' IANS - 6 hours ago

    The replies came through an affidavit which was filed by Mistry's investment companies to the NCLT's Mumbai bench. The rejoinder comes after Tata Sons had filed an over 200-page affidavit with the NCLT earlier in January, rebutting charges levelled … More »

  • Software to comply with Indian labour laws unveiled IANS - 6 hours ago

    "The SaaS-based plug-and-play tool gives free access to 40,000 pages of the Indian labour laws for compliance management by enterprises, factories, shops and businesses in the country," said Simpliance Founder Anil D'Souza. "Labour law compliance … More »

  • 50% of BSE IPO subscribed on 1st day of offering IANS - 8 hours ago

    Mumbai, Jan 23 (IANS) Stock exchange major BSE's initial public offering (IPO) was subscribed by 50 per cent on the first day of the Rs 1,243.43 offering which started on Monday. According to the data ... … More »

  • Note ban boosts deposits, lowers bank loan growth: Report IANS - 8 hours ago

    New Delhi, Jan 23 (IANS) The recent demonetisation in India led to an immediate jump in current account and savings account (CASA) deposits, incremental lending saw a massive drop, while digital banking witnessed a major surge, a report said on … More »

  • Okinawa Autotech launches e-scooter Ridge IANS - 8 hours ago

    New Delhi, Jan 23 (IANS) Electric two-wheeler manufacturer Okinawa Scooters on Monday launched its first offering in the Indian market an e-scooter -- Ridge -- priced at Rs 43,702 (Ex-showroom, Delhi). ... … More »

  • Differential impact of demonetisation across ABS transactions: Ind-Ra IANS - 8 hours ago

    Mumbai, Jan 23 (IANS) Credit ratings agency India Ratings and Research (Ind-Ra) on Monday said it has observed differential impact of demonetisation across asset-backed securities (ABS) transactions. According to the agency's report -- Indian ABS … More »

  • India against EU, Canada-proposed dispute settlement at WTO IANS - 9 hours ago

    New Delhi, Jan 23 (IANS) India has opposed an informal proposal by the EU and Canada for a global investment pact with an investor-to-state dispute settlement (ISDS) mechanism at the WTO by which corporates can take governments to international … More »

  • EIH's Q3 net profit up 8.29% IANS - 9 hours ago

    Mumbai, Jan 23 (IANS) Hospitality major EIH on Monday reported a rise of 8.29 per cent in its stand alone net profit for the third quarter (Q3) of 2016-17. The company which was formerly known as the 'East ... … More »

  • Asian Paints net profit up, hit by demonetisation IANS - 9 hours ago

    Mumbai, Jan 23 (IANS) Paints major Asian Paints on Monday posted a marginal 1.5 per cent rise in consolidated net profit to Rs 489.31 crore in the quarter ended December 31, as compared to Rs 482.02 crore ... … More »

  • SBI calls for raising income tax exemption limits IANS - 10 hours ago

    Mumbai, Jan 23 (IANS) Presenting an agenda for the forthcoming Union Budget at a time when banks are flush with funds post-demonetisation, state-run SBI on Monday called for raising various income tax ... … More »

  • Bharti Infratel's Q3 net up 25% IANS - 11 hours ago

    New Delhi, Jan 23 (IANS) Telecom tower infrastructure services provider Bharti Infratel's consolidated net profit went up 25 per cent in the third quarter of 2016-17, the company said on Monday. The company posted a net profit of Rs 620 crore for … More »

  • Budgetary expectations lift Indian equities IANS - 11 hours ago

    Mumbai, Jan 23 (IANS) Hopes of budgetary incentives and healthy buying in metal, automobile and oil and gas sectors lifted the Indian equities markets on Monday. However, profit booking at higher levels ... … More »

  • FRBM Committee submits report on fiscal consolidation roadmap IANS - 11 hours ago

    New Delhi, Jan 23 (IANS) The Fiscal Responsibility and Budget Management (FRBM) Committee, headed by former Revenue and Expenditure Secretary N.K. Singh, submitted its report to Finance Minister Arun Jaitley on Monday with recommendations on the … More »

  • NEXTracker, CleanMax Solar to set up tracker system in Chennai IANS - 12 hours ago

    New Delhi, Jan 23 (IANS) American solar solutions provider NEXTracker announced on Monday that it is partnering with India's CleanMax Solar to supply a 30 MW solar tracker system to a project in Tamil Nadu. "NEXTracker has partnered with CleanMax … More »

  • HUL's net profit up 7% in Q3 IANS - 12 hours ago

    Mumbai, Jan 23 (IANS) FMCG major Hindustan Unilever on Monday reported a seven per cent increase in its net profit to Rs 1,037.93 crore in the quarter ended December 31, 2016 as compared to Rs 971.66 crore in the corresponding quarter last fiscal … More »

  • Strong rupee, budgetary expectations lift equities IANS - 14 hours ago

    Mumbai, Jan 23 (IANS) Rupee appreciation, coupled with hopes of positive incentives in the upcoming Union Budget and broadly positive Asian indices, lifted the Indian equities markets on Monday. The key ... … More »

  • Global semiconductor revenue to grow 7.2% in 2017: Gartner IANS - 15 hours ago

    Mumbai, Jan 23 (IANS) Worldwide semiconductor revenue is set to hit $364.1 billion in 2017, an increase of 7.2 per cent from 2016, representing a turnaround for the industry as it experienced 1.5 per cent growth in 2016, market research firm Gartner … More »

  • itel unveils 4G VoLTE-enabled smartphone at Rs 7,550 IANS - 15 hours ago

    New Delhi, Jan 23 (IANS) itel Mobile, part of Chinese mobile manufacturer Transsion Holdings, on Monday launched a new it1518 4G VoLTE-enabled smartphone at Rs 7,550. The 5-inch device houses 8MP rear ... … More »

  • Indian equities buoy on strong rupee, budgetary expectations IANS - 16 hours ago

    Mumbai, Jan 23 (IANS) Indian equities markets traded on a flat-to-positive note during the mid-afternoon trade session on Monday, as rupee appreciation, coupled with hopes of positive incentives in the ... … More »

  • Amazon India to empower Naga women entrepreneurs IANS - 16 hours ago

    Bengaluru, Jan 23 (IANS) With a view to drive digital literacy among women entrepreneurs in Nagaland, Amazon India on Monday partnered with the state government and the National Skill Development Corp (NSDC) to provide them a global platform to sell … More »

  • 5 reasons you should bother about Budget 2017 Simplus Information Services - 18 hours ago

    The government reveals the income and expenditure incurred in the year gone by. It is the estimate that the government makes about the income and expenditure for the year ahead. The government announced the demonetization of currency notes in … More »

  • Is digitisation the need of the hour? Simplus Information Services - 18 hours ago

    What makes digitisation or digitalisation so important? The conversion of data from analogue to digital has been going on since the 1950s. Nowadays, digital technology is helping restructure businesses, organisations, and economies. … More »

  • Coal India discontinues Forward e-auction Scheme 2007 IANS - Sun 22 Jan, 2017 7:12 PM IST

    Kolkata, Jan 22 (IANS) Following special forward e-auction for power sector and exclusive e-auction for non-power consumers being conducted in a "regular manner", Coal India Ltd (CIL) has advised its subsidiaries to stop conducting the Forward … More »

  • Kudankulam Unit 2 generates full capacity of 1,000 MW IANS - Sun 22 Jan, 2017 7:08 PM IST

    Chennai, Jan 22 (IANS) The second 1,000 MW atomic power reactor at the Kundankulam Nuclear Power Project (KNPP) in Tamil Nadu has attained its maximum capacity, the Russian builders announced on Sunday. "Kudankulam NPP Unit No 2 has for the first … More »

  • Non-life insurers' premium income grows over 25% in December IANS - Sun 22 Jan, 2017 5:04 PM IST

    Kolkata, Jan 22 (IANS) Non-life insurance companies posted over 25 per cent increase in their gross premium income (direct premium income underwritten) to Rs 9,760.23 crore in December compared to Rs 7,777.38 ... … More »

MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    17.53+0.18+1.04%
    SUZLON.BO
    330.85-4.45-1.33%
    GRUH.BO
    80.75-0.40-0.49%
    IBREALEST-.BO
    929.25+21.95+2.42%
    BAJFINANCE.BO
    181.30+9.85+5.75%
    HINDALCO.BO
  • Price % Gainers
    Price % Gainers
    NamePriceChange% Chg
    67.80+11.30+20.00%
    BELLACASA.BO
    27.00+4.50+20.00%
    ORIENTHOT.BO
    2,288.85+381.45+20.00%
    BHARATRAS.BO
    215.25+35.85+19.98%
    DHPIND.BO
    133.00+22.15+19.98%
    KATWAUD.BO
  • Price % Losers
    Price % Losers
    NamePriceChange% Chg
    39.10-4.40-10.11%
    VARDHINDQ.BO
    87.40-9.70-9.99%
    SAPL.BO
    33.45-3.70-9.96%
    ABHIINFRA.BO
    79.90-8.65-9.77%
    BINNY.BO
    20.30-2.10-9.38%
    TRENDELEC.BO
  •  
    Recent Quotes
    Symbol Price Change % ChgChart 
    Your most recently viewed tickers will automatically show up here if you type a ticker in the "Enter symbol/company" at the bottom of this module.
    You need to enable your browser cookies to view your most recent quotes.
  • Recent Quotes News

    •  
      Sign-in to view quotes in your portfolios.