Oracle

Oracle shares plunge after disappointing earnings

By Benjamin SnyderManaging Editor
Benjamin SnyderManaging Editor

Benjamin Snyder is Fortune's managing editor, leading operations for the newsroom.

Prior to rejoining Fortune, he was a managing editor at Business Insider and has worked as an editor for Bloomberg, LinkedIn and CNBC, covering leadership stories, sports business, careers and business news. He started his career as a breaking news reporter at Fortune in 2014.

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<h1>Oracle</h1> Oracle went to battle with Hewlett-Packard last year after it tried to stop making software for devices using its rival's Intel Itanium server chip. Oracle lost the suit—and HP is seeking a reported $4 billion in damages. Documents unearthed during the litigation process revealed Oracle EVP Keith Block's distrust in president Mark Hurd's hardware plan for the company, pertaining to its 2010 acquisition of Sun Microsystems. (Block eventually resigned.) But the mess didn't keep the tech giant from having a successful 2012. Oracle's software business propelled sales, helping profits rise 16.8% to $10 billion<em>. -- C.</em>L.

Oracle

Oracle went to battle with Hewlett-Packard last year after it tried to stop making software for devices using its rival's Intel Itanium server chip. Oracle lost the suit—and HP is seeking a reported $4 billion in damages. Documents unearthed during the litigation process revealed Oracle EVP Keith Block's distrust in president Mark Hurd's hardware plan for the company, pertaining to its 2010 acquisition of Sun Microsystems. (Block eventually resigned.) But the mess didn't keep the tech giant from having a successful 2012. Oracle's software business propelled sales, helping profits rise 16.8% to $10 billion. -- C.L.
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Shares of Oracle plunged by about 8% in afterhours trading on Thursday after the California business software company reported quarterly earnings and revenue that failed to meet analyst expectations.

The company posted its fiscal fourth-quarter profits excluding certain items of 92 cents per share, but analysts had expected earnings of 95 cents a share. Additionally, although Oracle’s revenue came in at $11.32 billion (up 3% from $10.95 billion in 2013), that figure was lower than analyst expectations of $11.48 billion.

Meanwhile, the company’s net income fell 4%, to $3.65 billion from $3.81 billion in the three months ending on May 31.

Oracle blamed some of the shortfall on unfavorable exchange rate fluctuations in Venezuela.

Investors are also worried about Oracle’s (ORCL) competition in the cloud computing market against rivals like Salesforce.com (CFM), which may cut into the company’s profitability going forward.

“As our business has transitioned, more software revenues are being recognized over the life of a subscription rather than upfront,” said Oracle President Safra Catz in a statement.

Larry Ellison, the CEO of Oracle, touted the company as the second-largest software-as-a-service company in the world, while acknowledging the competition.  “We’re in front of everybody but Salesforce.com,” he said in a statement in comparing his software as a service business to that of his arch-rival.