Software giant blames currency fluctuations for weaker than expected financial results
Oracle has reported weaker than expected first quarterly results, in a move that raised market fears that the software giant’s cloud growth may have plateaued.
Oracle’s share price dropped over five per cent in after-hours trading, as Wall Street reacted in a negative manner to the results.
Oracle of late has been making a big push trying to convince businesses to ditch their complex data centres and instead move their systems to a cloud-based solution, preferably theirs.
For the three months ending 31 August, Oracle posted a net profit up 6 percent to $2.2bn (£1.7bn), from $2.1bn (£1.6bn) a year earlier.
Overall revenues rose just 1 percent to $9.193bn (£6.99bn) from $9.104bn (£6.92bn) a year earlier.
Drilling down into the results, Oracle reported that cloud services and license support revenues were $6.6 billion (£5bn), while cloud license and on-premise license revenues were $867m (£660m).
“We are off to an excellent start with Q1 non-GAAP earnings per share growing 19 percent in constant currency,” said Oracle CEO, Safra Catz. “That strong earnings per share growth rate increases my confidence that we will deliver on another fiscal year of double-digit non-GAAP earnings per share growth.”
“The vast majority of ERP applications running in the cloud are either Oracle Fusion or Oracle NetSuite systems,” said Oracle CEO, Mark Hurd. “In the first quarter, we increased our market share as customers continued to buy Oracle Fusion ERP to replace their existing SAP and Workday ERP systems.”
And Larry Ellison continued the bullish assessment of Oracle’s performance and predictably took the opportunity to bash Amazon.
“The Oracle Autonomous Database is now available on our second generation, highly-secure “Bare-Metal” cloud infrastructure,” said Oracle CTO, Larry Ellison. “Oracle’s Autonomous Database is faster, easier-to-use, more reliable, more secure and much lower cost than Amazon’s databases. And Oracle is the only database that can automatically patch itself while running to protect your data from data theft. These are just some of the reasons why Amazon uses the Oracle database to run its business.”
Oracle’s management tried to take some of the sting out of the results by announcing that the board had increased the authorisation for share repurchases by $12 billion.
In other news Oracle’s president Thomas Kurian is taking a period of extended leave, after some reports claimed that he had fallen out with Ellison over Oracle’s cloud strategy.
Oracle has also this year begun unveiling its blockchain software, as it seeks to expand its portfolio of products utilising the technology behind many cryptocurrencies.