Oracle new software sales at low end of estimates

Company reported a higher quarterly profit, but its 16 percent rise in new software sales came in at the lower end of expectations. (From Reuters)
Written by Natalie Gagliordi, Contributor
Oracle reported a higher quarterly profit on Wednesday, but its 16 percent rise in new software sales was at the low end of expectations, and its shares fell 8.3 percent.

Net income rose 25 percent to $1.34 billion, or 26 cents per share, in Oracle's fiscal third quarter ended February 29, from $1.03 billion, or 20 cents, a year earlier.

Sales of new software, which investors look to as a key indicator of the future financial performance of business software makers, rose to $1.6 billion in the quarter, from $1.4 billion a year earlier.

Oracle in December had forecast third-quarter new software sales to be 15 percent to 25 percent higher than a year earlier. Wall Street analysts were expecting the company to report growth around the mid-point of that range.

New software sales figures are a key indicator because the customers also sign maintenance contracts that cost 20 percent of the product price per year. Also, software makers get extra revenue from customers when they expand the number of workers using a computer program that they have already purchased.

Shares were down to $19.20 in after-hours trading after closing at $20.94 on Nasdaq.

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