Oracle disappoints analysts with sales
Shares fall 14 percent in after-hours trading
By Mike Tarsala, CBS MarketWatch
Last Update: 8:26 PM ET Sep 14, 1999
cbs.marketwatch.com
REDWOOD CITY, Calif. (CBS.MW) -- Oracle Corp. said Thursday that fiscal first quarter profit grew 21 percent, but software sales were below analyst estimates, causing the company's shares to plunge in after-hours trading.
Redwood City, Calif.-based Oracle reported net income grew to $237 million, or 16 cents a share, in the quarter ending Aug. 31, compared with $195 million, or 13 cents, in the year-ago quarter.
But revenue growth to $2 billion from $1.7 billion in the August, 1998, period met with analysts' dismay. Specifically, analysts didn't like the company's software revenue boost -- considered paltry at 9 percent.
"License revenue growth was tepid this quarter," said Gary Abbott, an analyst with Punk, Ziegel & Knoell in Boston. "It was somewhat surprising, given the expectations people had of double-digit license growth."
Oracle shares (ORCL: news, msgs) fell as much as 14 percent in after-hours trading on the news, falling as low as 39 after shedding 5/16 in normal market hours to 45 7/16 before the report. The shares had gained 69 percent over the last three months as investors bet on stronger sales.
"We had good earnings growth, margin improvements ... we got off to a decent start," said Jeff Henley, the company's chief financial officer in an interview with CBS MarketWatch.com.
Abbott was expecting software revenue growth of 15 percent. The company made its quarter on services sales, which rose 16 percent to $1.4 billion. |
