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The stock price of Oracle took a hit on Monday after the corporate giant saw growth in its business analytics virtually, stagnant segments of the cloud stagnant and overall performance lower than expected.
Here is a summary of Big Red's first quarter of fiscal year 2019, the three months to August 31, as released Monday:
- Revenue of $ 9.19 billion were up only 1% from last year's total of $ 9.1 billion.
- Net income of $ 2.27 billion was up eight percent from the first quarter of the year
- Earnings per share of $ 0.71 rose 10% from $ 0.61 last year.
- Cloud computing services and license support, which accounts for 72 percent of Oracle's total revenue, earned $ 6.6 billion in revenue, up 3 percent from $ 6.41 billion. the same quarter of the previous year.
- Cloud and on-premise licensing revenues, representing 9% of Oracle's total traffic, generated revenues of $ 867 million, down 3% from the first quarter of last year.
- Similarly, computer hardware was affected, with revenues of $ 904 million, down 4% from last year.
- Service revenues of $ 813 million decreased 5% from last year.
There is no doubt that Oracle remains a multi-billion dollar company that does not suffer from cash or profits. And who among us would sniff a net profit of $ 2.3 billion?
However, the figures suggest that Oracle's cloud activity slows after experiencing a dramatic rise. This division was considered crucial for the success and survival of the database giant, although some questioned the validity of its numbers. In any case, he already seems to have reached a plateau.
For this reason, Oracle has changed its reporting structure since last year, making annual comparisons of its sub-divisions difficult. However, cloud and on-prem revenue in Q1 2018 increased 9 percent from $ 7.4 billion and more or less the same as in the first quarter of 2019. With cloud and support revenue up only 3%, the drop in on-site sales reduced overall sales to only 1%.
Compare yourself: Q1 2018 compared to Q1 2019.
A little over a week ago, Oracle Cloud Manager, Thomas Kurian, revealed that he was taking an extended break from the company on the grounds that his revenue in the cloud was excessively swollen. The co-CEO, Mark Hurd, had little to say on the subject today to financial analysts, except to note that Kurian "was taking a break" and had to come back at some point.
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Oracle executives, however, remain optimistic, even as the cloud market begins to mature, Big Red's offerings will be more attractive than competitors such as Amazon Web Services in areas such as cloud platforms. services and infrastructure. -Service, where the technical director and chairman of the board, Larry Ellison, thinks that the Oracle database offering will be winning. In other words, the cloud is surfing just above the surface for now, but everything will be fine, promised. Crossed fingers.
"Anyone looking for the best database in terms of reliability, in terms of usability and optimal cost, will all use Oracle," Ellison told analysts when discussing Oracle's outlook.
Wall Street has not been sold on comfort. Noting that revenues were lower than previous estimates – both analysts and Oracle executives – the share price fell 6% to 46.32 US dollars after the stock market.
CEO Safra Katz tried to explain this error to analysts, attributing the shortfall to the fluctuating dollar.
"There was really just some currency difference between the time I gave my advice and what it ended up being," Katz said. "It's basically double the negative that I expected."
Anyone expecting a boost in the next quarter also seems to be disappointed. Katz said that she expects second-quarter earnings to see only a gain of between zero and three percent. In the meantime, we've heard at least one set of layoffs in the business over the last month – if you know any details, please let us know with confidence. ®
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