Oracle Corp. shares dropped in late trading Thursday as the software giant’s struggle to increase revenue continued.
The software company posted better-than-expected earnings for its fiscal second quarter but came up a bit short on revenue, where it has struggled for years. Oracle
reported a year-over-year revenue increase of 0.4%, the sixth consecutive quarter that sales have either declined or grown by less than 0.5% from the year before.
Chief Executive Safra Catz said in a conference call that revenue is expected to grow 1% to 3% in the current quarter, but only when removing the effects of currency fluctuations. Catz gave the same forecast three months ago for the quarter that was reported Thursday.
It was the first conference call for Catz and Oracle since co-CEO Mark Hurd died in October, after taking a medical leave the month before. Founder and Chairman Larry Ellison said that Oracle would not seek to replace Hurd, leaving Catz as the sole CEO.
“We have complete confidence in our existing management team,” Ellison said. “We’re doing a lot of recruiting, you’ll see a lot of announcements at the next layer down, that we’re hiring a bunch of people the next layer down, who are potential CEOs when both Safra and I retire, which is not anytime soon.”
Shares declined more than 2% in after-hours trading following release of the results, after closing with a 0.3% gain at $56.47. Oracle shares have risen 25% so far this year, as the S&P 500
has gained 27%.
Revenue for the November quarter rose to $9.61 billion from $9.57 billion, coming in a bit below the FactSet consensus of $9.65 billion. The company disclosed that it generated cloud-services and license-support revenue of $6.8 billion. Revenue from cloud licenses and on-premise licenses totaled $1.1 billion.
Oracle posted net income of $2.3 billion, or 69 cents a share, compared with $2.3 billion, or 61 cents, in the year-earlier period. After adjusting for stock-based compensation and other expenses, Oracle’s earnings per share climbed to 90 cents from 80 cents a year prior. Analysts tracked by FactSet had been modeling 89 cents in adjusted EPS.
The company declared a quarterly cash dividend of 24 cents a share, which will be payable on Jan. 23 to stockholders of record as of the close of business on Jan. 9.