Oracle Results Fail to Meet Expectations

Revenue from new software licenses and online or “cloud” subscriptions fell 2 percent year-over-year to $2.3 billion. The company predicted that number would rise by a range of 3 percent to 13 percent. Hardware systems revenue dropped 16 percent. While the hardware revenue decline has been continuing and expected, the decline in new software licenses and subscriptions was a surprise.

As one of the world’s largest makers of business software, Oracle helps Wall Street gauge the direction of corporate technology budgets. When Oracle’s earnings are lackluster, it is often a sign that companies are concerned about the economy.

But Oracle, which is based in Redwood City, Calif., also depends on international markets for a major portion of its revenue. Europe’s economy is still limping because of worries about government debt, and China’s economic growth has been slowing.

Oracle earned $2.5 billion, or 52 cents a share, in the quarter. That compares with $2.5 billion, or 49 cents a share, in the comparable period a year earlier, when it had more shares outstanding.

Revenue in the period, which ended Feb. 28 and was the third quarter of Oracle’s fiscal year, fell 1 percent to $8.96 billion from $9.04 billion, hurt in part by the stronger dollar.

Analysts polled by FactSet had expected earnings of 66 cents a share, excluding charges for past acquisitions and other costs, on revenue of $9.38 billion.

Shares of the company fell $2.73, or 7.7 percent, to $33 in after-hours trading after the announcement.