Oracle shares retreated on Thursday afternoon in trading after-hours even though the software giant has reported earnings for its fiscal fourth quarter that met expectations, plus announced a dividend increase and extended its program for share buyback.
Shares plummeted over 8% in extended trading hours to $30.50, as investors were fixated on the disappointing, flat growth in revenue, as the company’s ambitions for their cloud were met with results that looked sluggish.
Cloud has been said to be one of Oracle’s key areas for future growth, as the company attempts to manage its transition to cloud architecture from the traditional architecture of client-server.
Although Mark Hurd, the company president, reported that the company added over 500 new customers to its Software as a Service during the most recent quarter, the GAAP and non-GAAP licenses for new software and subscriptions for cloud software revenue was up only 1% to close the quarter at $4 billion.
The company has predicted that earnings would be between 56 and 59 cents per share versus a Wall Street consensus of 58 cents.
Total growth in revenue is expected to be up between 3% and 6%.
Growth for cloud subscription and software license revenue was expected to be flat or up to 8%. Hardware revenue growth has been expected to come in between a decrease of 6% to a growth of 2%.
Earnings for the fiscal fourth quarter for Oracle were 87 cents per share, which was up more than 5% over last year. Oracle’s revenue did not change and ended the quarter at $11 billion. Wall Street had expected revenue to reach $11.12 billion for the quarter.
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