Oracle Corp posted quarterly revenue below Wall Street estimates as the coronavirus crisis led clients in the hospitality, retail and transportation sectors to postpone purchases, sending its shares about 3% lower after the bell.
- Oracles revenue was below Wall Street’s estimates
- The business was impacted by clients in the hospitality, retail and transportation sectors postponing purchases
- Oracle did not provide any financial outlook for fiscal 2021
Customers from industries hit hardest by the pandemic pushed back orders as businesses tightened spending to battle a sagging economy. Rival SAP had also flagged postponed customer orders, which impacted its annual outlook.
“As the quarter progressed, we saw a drop-off in deals, especially in the industries most affected by the pandemic”, CEO Safra Catz said on a post-earnings call.
However, many of the deal discussions have already resumed as countries have started to reopen their economies, Catz said.
Oracle, which earns the biggest chunk of its sales from cloud offerings and software licensing, did not provide any financial outlook for fiscal 2021.
The company, which has been pushing aggressively into the cloud computing market to make up for its late start, recorded quarterly sales of $6.85 billion in the unit that includes Oracle Cloud, missing estimates of $6.98 billion.
Wedbush analyst Steve Koenig said Oracle’s cloud services revenue probably faced headwinds from lower spending by impacted industries such as retail, hospitality and transportation.
Revenue from the cloud license and on-premise license unit, which includes sales from the licensing of Oracle’s software products, dropped about 22% to $1.96 billion in the quarter, below estimates of $2.11 billion.
Catz said the company also saw delayed payments as some customers were impacted by financial constraints due to the pandemic.
Total revenue fell about 6% to $10.44 billion for the fourth quarter ended May 31, missing analysts’ average estimate of $10.63 billion, according to IBES data from Refinitiv.
On an adjusted basis, the Redwood, California-based company earned $1.20 per share, above expectations of $1.15 per share.
The team at Platform Executive hope you have enjoyed the ‘[post_title]’ article. Automatic translation from English to a growing list of languages via Google AI Cloud Translation. Initial reporting via our official content partners at Thomson Reuters. Reporting by Ayanti Bera in Bengaluru. Editing by Devika Syamnath.