Oracle's Q4 sales fall short
Oracle touted software as a service growth as well as hardware wins, but total revenue in the fourth quarter fell short of expectations.
The company reported fourth quarter earnings of $3.8 billion, or 80 cents a share, on revenue of $10.96 billion. Non-GAAP earnings for Oracle were 87 cents a share. Wall Street was expecting earnings of 87 cents a share on revenue of $11.12 billion.
Oracle touted its cloud strategy as well as its hardware products, but the sales miss won't do much to allay concerns that the company is having trouble battling companies like Workday and Salesforce as well as open source databases.
Also: Oracle's Q4 and beyond: Five big issues
For fiscal 2013, Oracle reported earnings of $17.6 billion, or $2.26 a share, on revenue of $37.2 billion.
Oracle president Safra Catz touted operating margins of 47 percent for the fiscal year. Oracle president Mark Hurd touted HCM cloud wins and called out Workday specifically in a statement. Oracle CEO Larry Ellison said Oracle sold 1,200 engineered systems in the fourth quarter and took a swipe at IBM's P-Series.
Despite the bluster, investors are likely to question Oracle's growth potential. To allay Wall Street a bit, Oracle said it has doubled its dividend to 12 cents a share, up from 6 cents a share. In addition, Oracle will buy $12 billion of its stock in a share repurchase program. Oracle is also moving to the New York Stock Exchange.
It's likely that investors are going to focus on the following figures:
- In the fourth quarter, software revenue was $8.43 billion, up 4 percent from a year ago. New software licenses and cloud subscriptions were $4.03 billion, up 1 percent from a year ago. Software license updates and support sales were $4.4 billion, up 6 percent from a year ago.
- The hardware business continues to skid. Total hardware sales in the fourth quarter were $1.43 billion, down 9 percent from a year ago. Hardware systems product revenue was down 13 percent and support was down 3 percent. Needless to say, analysts are still looking for Oracle's hardware business to bottom. For the fiscal year, hardware systems product sales were down 21 percent.