Oracle's Q4 results disappoint investors

Enterprise Applications

by CBR Staff Writer| 20 June 2014

Troubled times ahead?

Oracle has announced its fiscal fourth-quarter results, ending up with a net income of $3.6bn that disappointed investors looking for better results.

Oracle posted non-GAAP earnings of 92 cents per share on a revenue of $11.3bn, up 3% annually, which was a bit low as analysts were looking for earnings of 95 cents per share on revenue of $11.48bn.

Shares of the company climbed up 10% over the past three months in expectations of a surge in software business and cloud computing, reports Reuters.

As cited in zdnet.com, the company attributed part of the problem to "a non-operating loss caused by exchange rate changes in Venezuela."

As smaller and more aggressive companies like Salesforce.com Inc and Workday Inc eat into Oracle's business in software and Internet-based products by offering throwaway prices, Oracle is looking at some tough times ahead.

Already spending across business is expected to become further constrained as companies move to cloud services that cost less, instead of operating the full-fledged IT departments.

Although software and cloud services revenue from Oracle totaled approximately $8.9bn for the quarter, up 4% year-over-year, it still constitutes under 5% of its overall revenue.

For the fiscal first quarter, Oracle expects software and cloud revenue to grow between 6-8%, including expectations for software- and platform-related cloud services, which will grow between 25-35%.

Meanwhile, on a brighter note, revenue from Oracle's hardware systems products grew 2% to $870m.

Overall industry opinion on Oracle's results remains mixed though few analysts pointed out that the company should get its act together on the M&A activities, which have declined off late. However, a report by Bloomberg said that the company is reportedly in talks to buy software maker Micros Systems Inc.

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