Tags: Oracle Revenue Falls Short as Hardware Sales Drop

Oracle Revenue Falls Short as Hardware Sales Drop

Thursday, 20 Sep 2012 04:42 PM

Oracle Corp. reported fiscal first-quarter revenue that missed analysts’ estimates as sales of computer hardware continued to decline.

Sales for the period, which ended in August, decreased 2.3 percent to $8.18 billion, and profit excluding some items was 53 cents a share, the Redwood City, California-based company said Thursday in a statement. Analysts on average had estimated earnings of 53 cents a share on revenue of $8.42 billion, according to data compiled by Bloomberg.

Oracle’s acquisitions this year of RightNow Technologies Inc. and Taleo Corp. -- which respectively sell customer service and human resources software delivered as an Internet service -- boosted applications sales during the seasonally slow first quarter. That wasn’t enough to counter slumping revenue for computer hardware that Oracle gained from the 2010 purchase of Sun Microsystems Inc.

“Hardware’s going to continue to be a struggle for them,” said Pat Walravens, an analyst at JMP Securities LLC. “Sun was a big company and it’s going down.”

The shares fell slightly in late trading after closing down 1.6 percent to $32.26 at the close in New York. The stock has gained 26 percent this year.

Net income rose 11 percent to $2.03 billion, or 41 cents a share, from $1.84 billion, or 36 cents, a year earlier.

Oracle -- the second-largest maker of business applications used to manage companies’ sales, finances and human resources -- has been acquiring online software companies to challenge market leader SAP AG and Salesforce.com Inc.

Oracle is also pushing sales of its high-end Exadata and Exalytics machines, which use Intel Corp. chips, as sales of servers using Sun’s Sparc chip wane.

Chief Executive Officer Larry Ellison and co-presidents Safra Catz and Mark Hurd will outline Oracle’s product roadmaps at the company’s OpenWorld conference, which runs Sept. 30 to Oct. 4 in San Francisco.

During a conference call with analysts at 5 p.m. New York time, Catz is expected to provide financial guidance for the fiscal second quarter, which ends in November. Oracle is expected to report profit excluding some items of 61 cents a share on revenue of $9.24 billion, according to the average of analysts’s estimates compiled by Bloomberg.

Oracle agreed in February to acquire Taleo for about $1.9 billion. Last October, Oracle agreed to purchase RightNow for $1.5 billion. Oracle agreed to buy Sun for $7.4 billion in April 2009.

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Oracle Corp. reported fiscal first-quarter revenue that missed analysts’ estimates as sales of computer hardware continued to decline.
Oracle Revenue Falls Short as Hardware Sales Drop
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