While this move to the cloud has provided the company with opportunities to break into new markets, the shift has hurt its traditional business of selling licenses for software installed on corporate systems.
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Revenues were down 2% on a year-over-year basis to $8.45 billion and also fell short of the Zacks Consensus Estimate of $8.51 billion.
On Oracle’s (ORCL) conference call with analysts this evening following slightly lower-than-expected fiscal Q1 revenue, the company forecast revenue to be in a range of down 2% to up 1%, and earnings per share of 63 cents to 66 cents.
Oracle shares slipped 0.57 percent to $38.05 in the after-hours trading session. After backing out the effect of currencies, the company said, sales would have risen by 7 percent. Included in that figure were Software-as-a-Service (SaaS) and Platform-as-a-Service (PaaS) revenue of $451 million, up 34 percent over 2015’s first quarter, and cloud infrastructure as a service (IaaS) revenue of $160 million, up 16 percent.
Oracle said it targets continued growth in SaaS and PaaS cloud subscription contracts, which nearly tripled in the quarter. Cloud plus On-Premise Software Revenues were $6.5 billion, down 2% in USA dollars and up 6% in constant currency. The New York-based fund global Value Advisers Llc is also positive about the stock, possessing 947,875 shares or 7.27% of their stocks portfolio. They issued a “buy” rating and a $44.00 price objective for the company.
Oracle Corp. (ORCL) reported first quarter adjusted EPS of $0.53 after the close Wednesday, down from $0.62 in the previous year.
Oracle plans to launch its Exadata technology as a service at its OpenWorld customer powwow in late October. Operating cash flow on a trailing twelve-month basis was $13.5 billion. The stock has a 50-day moving average of $38.3 and a 200-day moving average of $41.59. The sell-side firm has maintained a Neutral rating with a target price of $40 on Oracle stock.
Oracle expects cloud revenues to pick up in the second half of the year, leading to full year SaaS and PaaS revenue growth guidance of 50%.
Wedbush assumed that Oracle will be challenged, as it revamps its business model due to the rapid enhancement in the technological environment.
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“The strengthening of the U.S. dollar compared to foreign currencies had a significant impact on results in the quarter”, said the company. But the company’s stock price was nevertheless down by nearly three per cent on the news that the company’s software sales appear to be stalling – and that cloud has a long way to go in order to make up the shortfall.
