Oracle shares slip after falling short of Wall Street's fiscal 1Q sales estimate

Shares in the tech company Oracle (NYSE:ORCL) slipped in Monday’s after-hours trade after falling short of Wall Street’s estimates for sales in its fiscal first quarter.

On an adjusted basis, the Redwood Shores, California-based company earned US$0.71 per share on revenue of US$9.19bn. Analysts had expected Oracle to report profits of US$0.69 per share on revenue of US$9.28bn.

In response, Oracle shares dropped by 5.5% to US$46.48 in Monday’s after-hours session.

Revenues from its cloud services and license support group, which is the engine driving most of Oracle’s business, jumped 3% from last year to US$6.61bn. Sales from its cloud license and on-premises license business, meanwhile, came in at US$867mln, down 9% from the US$894mln in sales seen in the year-ago quarter.

Oracle has taken considerable flak recently from Wall Street analysts who say the tech company’s migration to the cloud is taking longer than expected.

But CEO Mark Hurd said Oracle reaped the benefits in the quarter of its customers buying the Oracle Fusion Enterprise Resource planning system to replace their existing SAP and Workday ERP Systems. “The vast majority of ERP applications running in the cloud are either Oracle Fusion or Oracle NetSuite systems,” said Hurd.

Nearly 5,500 customers are now using the Oracle Fusion system while the number signed up for NetSuite ERP is over 15,000, according to the company.

Revenue from Oracle’s hardware sales came in 10% lower from last year at US$904mln in the three-month period until August 31 while sales from services fell 9% to US$813mln.

Story by ProactiveInvestors