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Oracle Blows It Again

Earnings were okay at 80 cents a share or $3.81 billion; but hardware sales cratered again this time by 13% to $849 million

Larry Ellison is paying for dissing the cloud gods.

He missed his numbers for the second time in a row in his fiscal fourth quarter ended in May, historically Oracle’s strongest quarter, raising questions about Oracle being able to adapt and compete in the new cloud world.

In Q3, Oracle’s salesforce was blamed. This time through the global economy was held responsible for Oracle not closing sales, particularly in Asia and Latin America.

CFO Safra Catz claimed the deals have either gotten smaller or have been pushed back to a later date. They’re not going to rivals, she said, a statement that flies in the face of group think, which figures Oracle’s time is being beat by the cloud subscription set, which put its oars in the water before Oracle did.

Ironically, Larry claims that Oracle’s SaaS business is second only to Salesforce.com, the market leader, and is on track to break a billion dollars annually.

Oracle doesn’t break out its cloud business from new on-premise software sales but the two of them together only tickled its revenues by 1% to $4.03 billion in the quarter. They were supposed to be up as much as 11%, Oracle previously forecast. Still it said it signed 500 new subscription customers in Q4.

Next week, Oracle is going to whistle up the cavalry and announce “startling” alliances with some of “the most important SaaS infrastructure companies,” Ellison said, ticking off Salesforce, Microsoft and his personal favorite, NetSuite, where he’s invested. Evidently they’re going to pledge to move its software.

The deals are supposed to “reshape the perception of Oracle technology in the cloud.”

Overall revenues were flat at $10.9 billion, missing estimates of roughly $11.1 billion.

Earnings were okay at 80 cents a share or $3.81 billion.

Hardware sales cratered again this time by 13% to $849 million. In Q3 they were down 19%. Larry continues to promise there will soon be a pot of gold at the end of this particularly rainbow. So far all it’s gotten is rain, buckets of it.

Exadata machines and other high-end engineered systems now account for more than a third of the company’s hardware business. Oracle delivered 1,200 of the beasts in the fourth quarter.

To make things up to shareholders Oracle doubled its puny six-cent-a-share quarterly dividend to 12 cents and added $12 billion to its buyback fund. It’s also applied to be listed on the New York Stock Exchange, though exactly what benefit that bestows is unclear. Maybe Oracle didn’t like the way the Nasdaq handled the Facebook IPO.

As a result of the news, Oracle shares dropped as much as 9.2% in after-hours trading. Then they settled down a little, off only 8.76% on an otherwise crummy day on Wall Street.

Oracle is now predicting that new software sales and subscriptions will increase 0%-8% this quarter.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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