Oracle's Revenue Declines as It Struggles to Catch Up in Cloud Services -- Update

Envoyer par e-mail
03/15/2019 | 12:08 am
Patrick Thomas


By Jay Greene and Patrick Thomas



Oracle Corp. said its revenue fell 1% in its latest quarter, a second-consecutive period of decline as the software giant continues to struggle adapting its business for the cloud era.



The sluggish performance came even as corporate-technology rivals such as Microsoft Corp. and Salesforce.com Inc. have posted double-digit gains in revenue in recent weeks.



Oracle has been slower than some of its rivals to develop cloud-computing technology -- services customers rent on demand over the web. That has put competitors in a better position to win business as customers shift away from managing their own computing operations.



The company expects to post revenue that is flat to down 2% in the current quarter, co-Chief Executive Safra Catz said during a conference call with analysts. Oracle shares, which fell a penny to $53.05 during regular trading Thursday, slid 3.9% after hours.



Brad Reback, an analyst at Stifel Nicolaus & Co., said the current spending environment for information technology is the most robust in two decades. "The world is passing Oracle by," he said.



Oracle's slip in revenue in the fiscal third quarter to $9.61 billion, from $9.68 billion a year earlier, came in better than the $9.59 billion expected by Wall Street analysts, according to FactSet.



Profit came to $2.75 billion, compared with a year-earlier loss of $4.05 billion that included a one-time $6.9 billion charge related to the then-new U.S. tax law.



Excluding one-time items, Oracle posted a profit of 87 cents a share. Analysts polled by FactSet were expecting adjusted earnings of 84 cents a share.



The company said cloud-service and license-support revenue -- Oracle's largest segment -- grew 1% to $6.66 billion.



Oracle changed how it reports its quarterly financial results last year, combining its cloud-computing business with its licensing-support business. That obfuscated the view into Oracle's cloud-computing performance. The company had previously disclosed revenue and operating income of its various cloud-computing businesses.



Nonetheless, Ms. Catz highlighted the company's cloud growth. "As a percentage of our total software business, cloud is now more than double what it was just three years ago and provides us with the ability to accelerate overall software revenue growth as this mix shift continues," she told analysts.



Oracle spent $10 billion in the quarter, buying back 206 million shares, marking the fourth consecutive quarter in which repurchases hit $10 billion or more. Ms. Catz said the company has cut the number of shares outstanding by nearly 16% in the last year. That reduction has helped boost Oracle's per-share earnings results.



Oracle increased its quarterly dividend 26% to 24 cents per share.



Write to Jay Greene at Jay.Greene@wsj.com and Patrick Thomas at Patrick.Thomas@wsj.com





Envoyer par e-mail