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Oracle shares plunge after disappointing earnings

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.