Oracle revenue forecast disappoints as license sales continue falling
By Abhirup Roy
(Reuters) - Oracle Corp's (ORCL.N: Quote) sales fell more than expected in the first quarter, hurt by a strong dollar and a continued drop in licensed software sales and the company warned revenue could fall in the current quarter even on a constant currency basis.
Like its rivals such as SAP (SAPG.DE: Quote), IBM Corp (IBM.N: Quote) and Microsoft Corp (MSFT.O: Quote), Oracle is striving to boost Internet-based software sales to head off fast-growing competitors such as Salesforce.com Inc (CRM.N: Quote).
But, analysts have said Oracle's cloud software business has not been growing fast enough to make up for declines in the 38-year-old company's licensed software business due to reasons ranging from slow customer adoption to tough competition.
Oracle's revenue declined 1.7 percent to $8.45 billion in the quarter ended Aug. 31, missing analysts estimates for the third quarter in a row.
The company said sales increased 7 percent on a constant currency basis. However, it forecast revenue to range between a fall of 2 percent to growth of 1 percent in the current quarter.
"On an apples-to-apples basis, that's disappointing. It's pretty clearly below consensus even at the top end," Wedbush Securities Inc analyst Steve Koenig said.
Oracle's shares fell as much as 2.8 percent in extended trading on Wednesday.
The company's net income declined 20 percent to $1.75 billion in the first quarter. Excluding items, it earned 53 cents per share, more than analysts' estimate of 52 cents. Continued...