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Oracle Shares Slide as Profit, Sales Miss Forecasts

Tuesday, 20 Dec 2011 05:19 PM

Technology giant Oracle Corp's profit and sales missed Wall Street forecasts, sending its shares plunging 9 percent in late trading Tuesday and raising concerns that a global economic slowdown will hurt tech spending.

The company also posted an unexpected sequential decline in the revenue it gets for providing maintenance on its software products -- one of the most lucrative parts of its business.

That hasn't happened to Oracle since the fall of 2008 when the financial crisis began with the collapse of Lehman Brothers , said Cowen & Co analyst Peter Goldmacher.

"Tech spending is more under pressure than people thought," G oldmacher said. "IT budgets have been relatively flat; when you have issues like you do in Europe, people naturally pull back."

Oracle, the world's No. 3 software maker, reported profit, excluding items, of 54 cents per share in its second quarter ended Nov. 30, missing the average analyst forecast of 57 cents, according to Thomson Reuters I/B/E/S.

"Every technology company is going to get hit. This is just the start," said Global Equities Research analyst Trip Chowdhry.

New software sales rose 2 percent from a year earlier to $2 billion during the quarter. Analysts, on average, were expecting new software sales of $2.2 billion, according to StreetAccount.

Oracle also reported that hardware product sales fell 14 percent to $953 million, below the average Street account forecast of $1.06 billion.

Its software maintenance revenue fell to $3.99 billion during the second quarter from $4.02 billion in the first quarter.

Oracle's shares fell to $26.55 in extended trade after closing on Nasdaq at $29.17.

© 2017 Thomson/Reuters. All rights reserved.

 
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Technology giant Oracle Corp'sprofit and sales missed Wall Street forecasts, sending its shares plunging 9 percent in late trading Tuesday and raising concerns that a global economic slowdown will hurt tech spending. The company also posted an unexpected sequential decline...
oracle,software,tech,earns
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2011-19-20
Tuesday, 20 Dec 2011 05:19 PM
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