Oracle forecast a return to growth in new software sales this quarter, after blaming its rapidly expanding salesforce for a severe miss in third-quarter revenue that drove its shares 8 percent lower on Wednesday.
The world's No. 3 software maker projected a 1 to 11 percent rise in new software licenses and Internet-based subscriptions in the May quarter, following a 2-percent slip in the February quarter that badly missed Wall Street's targets.
Executives ascribed the miss mainly to a poor salesforce performance.
"What we really saw was the lack of urgency we sometimes see in the sales force, as Q3 deals fall into Q4," Chief Financial Officer Safra Catz told analysts on a conference call.
"Since we've been adding literally thousands of new sales reps around the world, the problem was largely sales execution, especially with the new reps as they ran out of runway in Q3."
Wall Street remains concerned about tepid spending by governments and corporations in an uncertain global environment, but Catz dismissed those fears.
Oracle posted a 2-percent drop in new software sales and Internet-based software subscriptions to $2.3 billion in its fiscal third quarter, well below Wall Street's and its own projections. Investors scrutinize new software sales because they generate high-margin, long-term maintenance contracts and are an important barometer of future profit.
The company had forecast a 3 to 13 percent jump in new software license and cloud-subscription revenue.
"It doesn't help that the sequester deadline is on the last day of our quarter, and so that has a little bit of an impact here in North America, but not necessarily anywhere else," Catz said. "The economy has been as it is in Europe for a while."