Oracle has issued a weaker than projected outlook for the remainder of the year, warning that it still has to close big corporate deals to remain on course.
The largest maker of corporate-database software predicted last night that profit, excluding some items, for the fiscal second quarter will be 64 cents to 69 cents a share.
Oracle would have to reach the top of that range to match analysts’ 69 cent average estimate, according to data compiled by Bloomberg.
Chief executive Larry Ellison is coming off a year of stagnant sales as Salesforce.com and Workday eat into Oracle’s revenue with web-based products.
While he is seeking to convert customers to cloud-computing and buying smaller companies to offer more business software, Ellison faces headwinds in technology spending that has resulted in flat to negative sales growth in the last two fiscal quarters.
Adjusted sales in the fiscal first quarter ending in August trailed analysts’ estimates, rising 2.1% to $8.38 billion, compared with the average analyst projection for $8.48 billion. Net income rose 7.7% to $2.19 billion.
New software license and cloud revenue, a key indicator of future sales, climbed 4% to $1.66 billion in the first quarter, Oracle said.
Hardware sales stemming from Oracle’s 2010 acquisition of Sun Microsystems fell 14% to $669m.
But there were some bright spots in today's figures. Sales of Oracle’s Exadata and Exalogic computers increased 60% during the quarter, and software license growth was 15% in North and South America, when adjusted for currency effects.
Ellison is scheduled to kick off Oracle’s annual OpenWorld conference on September 22. The company said he will unveil an add-on product to Oracle’s latest 12c database that lets customers run programmes using faster computer memory instead of hard drives.
The results added up to a tough day for Ellison. The CEO could not join the analyst call because he was attending an America’s Cup yacht race on San Francisco Bay.
Oracle Team USA, backed by Ellison, lost the first race and the second was scrubbed because of strong winds, putting Emirates Team New Zealand one race away from clinching the trophy.
