Oracle Misses Wall Street's Q4 Profit Forecast On Flat License Sales, Shares Hammered In After-Hours Trading


Oracle shares plummeted after the bell Thursday after the vendor missed Wall Street's profit and revenue expectations for its fiscal fourth quarter.

During the quarter, Oracle reported a profit of $3.6 billion, or 80 cents per share, which was down 4 percent compared to last year's fourth quarter. Its revenue rose 3 percent year-over-year to $11.3 billion.

Wall Street analysts surveyed by Thomson Reuters were expecting $11.48 billion and 83 cents per share.

Investors weren't super-excited about the results, as Oracle shares initially dropped more than 8 percent to $39.31, then rose to $42.43 in later after-hours trading.

[Related: Ellison: Oracle's In-Memory Tech Is So Fast, Some Customers Think Their Database Is Broken]

Oracle's revenue from new software licenses was flat during the quarter at $3.8 billion. With Oracle facing numerous competitors to both its traditional database business and its application portfolio, this is a number Wall Street analysts have been paying close attention to.

Over the next few years, Oracle will be "laser-focused" on becoming the No. 1 vendor in both SaaS and PaaS, CEO Larry Ellison said on the Redwood Shores, Calif.-based vendor's earnings call.

During the quarter, Oracle's SaaS and PaaS revenues grew 25 percent, but at $322 million, these businesses still account for less than 3 percent of Oracle's overall revenue.

Oracle is forecasting new software license and cloud revenue to grow 6 percent to 8 percent this quarter, which includes SaaS and PaaS growth of 25 percent to 35 percent.

Oracle has trained a specialized sales force to sell SaaS and PaaS subscriptions against this "new generation" of cloud competitors, and this approach is working, Ellison said.

Oracle is already No. 2 in overall SaaS subscription revenue, and it plans to boost SaaS bookings by 50 percent in its current fiscal year, according to Ellison.

Oracle's cloud Infrastructure-as-a-Service (IaaS) revenue jumped 13 percent to $128 million. Its combined software and cloud revenue grew 4 percent to $8.9 billion, while revenue from hardware rose 2 percent to $1.5 billion during the quarter.

For its current quarter, Oracle is expecting revenue to grow between 4 percent and 6 percent compared to last year, with earnings per share of between 62 percent and 66 percent. Wall Street has been expecting revenue growth of 4.8 percent and earnings of 64 cents per share.

Oracle executives didn't reveal any information on its acquisition talks with Micros Systems, a vendor of software for hotels, restaurants and retailers. Earlier this week, Bloomberg reported that Oracle and Micros were in "exclusive" negotiations for a deal worth more than $5 billion.

PUBLISHED JUNE 19, 2014