With revenue flat, Oracle blames strong U.S. dollar
Shares of Oracle jumped in after-hours trading after the company reported flat revenue in its most recent quarter. The software giant blamed its lack of sales growth on the strong U.S. dollar weighing down its overseas business. Here are the key points from Tuesday’s third-quarter earnings report.
What you need to know: Oracle (ORCL) posted the same third-quarter revenue year-over-year: $9.3 billion. That total came up short of Wall Street’s expectations, as analysts had predicted $9.46 billion in sales. Oracle also reported declining profits for the quarter. The company earned $2.49 billion last quarter, or 57 cents per share, which is down slightly from $2.56 billion in the same quarter last year.
Oracle blamed its flat sales and profit drop on unfavorable currency fluctuations, as the company said it would have posted a 6% bump in revenue, along with a 7% gain in profits, based on a stable exchange rates.
“Once you normalize for exchange rates, it was a very strong growth quarter for us,” co-CEO Safra Catz said in a statement.
The big number: Oracle also announced a 25% rise to its quarterly dividend, from 12 cents per share to 15 cents, with shareholders set to receive the cash return in April.
The market reacted favorably to the increased dividend. Oracle’s stock fell initially in after-hours trading, but then swiftly rallied to gain about 2%.
What you might have missed: Oracle has placed a lot of focus on its cloud business, which still makes up only about 6% of the company’s overall revenue even though sales were up almost 30% in the third quarter. Co-CEO Mark Hurd said in a statement that the company did nearly $200 million in new cloud business in the third quarter and chairman Larry Ellison said Oracle is on its way to more than $1 billion in new cloud sales in 2015.