Oracle shares fall after company misses Wall Street's 3rd-quarter expectations
In this Monday, June 18, 2012, file photo, a man walks near the headquarters in Redwood City, Calif. Oracle says its fiscal third-quarter revenue for 2012 declined by 1 percent, falling short of analysts' expectations and sending shares down sharply in after-hours trading. (AP Photo / Paul Sakuma, File)
The Associated Press
Published Wednesday, March 20, 2013 5:26PM EDT
NEW YORK -- Oracle Corp. on Wednesday reported flat earnings for its fiscal third-quarter, hurt by a drop in sales of hardware systems and new software. Shares tumbled in after-hours trading on the weaker-than-expected results.
Revenue from new software licenses and online or "cloud" subscriptions, a closely watched figure, fell 2 per cent year-over-year to $2.3 billion. The company had predicted that number would rise by 3 per cent to 13 per cent. Sales of hardware systems products dropped 23 per cent.
As one of the world's largest makers of business software, Oracle's numbers help Wall Street gauge the direction of corporate technology budgets. When Oracle's earnings are lacklustre, it's often a sign that companies are concerned about the economy.
But Oracle also depends on international markets for a major part of its revenue. Europe's economy is still limping amid worries about unwieldy government debts and China's economic growth has been slowing.
Oracle earned $2.5 billion, or 52 cents per share, in the December-February quarter. That compares with $2.5 billion, or 49 cents per share, in the same period a year earlier, when it had more shares outstanding. Adjusted earnings totalled 65 cents per share in the latest quarter.
Revenue fell 1 per cent to $8.96 billion from $9.04 billion, hurt in part by the stronger dollar.
Analysts polled by FactSet had expected earnings of 66 cents per share, excluding charges for past acquisitions and other costs, on revenue of $9.38 billion.
Shares of the Redwood City, Calif., company fell $2.76, or nearly 8 per cent, to $33 in after-hours trading following the announcement. The stock had closed the regular session up 8 cents at $35.76 before the report.
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