Oracle Stock Tumbles After Weak Quarter

Shares of Oracle Corp. fell 7% in after-hours trade Wednesday following the company's weaker-than-expected earnings report. The software company reported net income of $2.78 billion, or 62 cents a share, compared with a year-earlier profit of $3.6 billion, or 80 cents. Adjusted earnings per share were 78 cents, below the FactSet consensus estimate of 86 cents. Revenue declined to $10.7 billion from $11.3 billion last year, below the average analyst estimate of $10.9 billion. The company, which has been in transition to a cloud computing company from legacy software, reported $8.4 billion in software and cloud revenues, down from $8.9 billion a year ago. However, Oracle said it was happy to have beaten its internal forecast on software-as-a-service and platform-as-a-service revenue. The company forecast $300 billion of new revenue, but ended the quarter with a better-than-expected $426 billion. It expects to book between $1.5 billion and $2 billion of new SaaS and PaaS business in the current fiscal year, which Oracle Chief Technology Officer Larry Ellison said means Oracle is on track to sell more new SaaS and PaaS business than rival salesforce.com . Oracle also reported a slowdown in new software license deals, to $3.1 billion from $3.8 billion last year.