Oracle Profit, Revenue Miss Expectations; Shares Drop
Oraclereported quarterly earnings and revenue that missed Wall Street's expectations on Tuesday, sending shares lower in trading after the closing bell.
The world's No. 3 software maker said earnings excluding items were 54 cents a share in its fiscal second quarter, up from 51 cents per share a year ago.
Revenue was $8.8 billion, a 2 percent increase from $8.65 billion in the year-earlier period.
Analysts had expected Oracle to report earnings of 57 cents per share on revenue of $9.23 billion, according to Thomson Reuters.
The company's stock fell sharply lower in after-hours trading. (Click here for latest quote.)
The company also posted an unexpected sequential decline in the revenue it gets for providing maintenance on its software products — one of the most lucrative parts of its business.
That hasn't happened to Oracle since the fall of 2008 when the financial crisis began with the collapse of Lehman Brothers, said Cowen & Co analyst Peter Goldmacher.
"Tech spending is more under pressure than people thought," Goldmacher said. "IT budgets have been relatively flat; when you have issues like you do in Europe, people naturally pull back."
When the company last reported earnings three months ago, it had forecast that new software sales would climb between 6 and 16 percent.
"Every technology company is going to get hit. This is just the start," said Global Equities Research analyst Trip Chowdhry.
Oracle also reported that hardware product sales fell 14 percent to $953 million. It had forecast that they would be flat to down 5 percent.
Oracle said it sees new software revenue from flat to up to 10 percent in the upcoming fiscal third quarter.