Oracle executive chairman Larry Ellison said the software giant won’t hire a second chief executive officer to run the business alongside CEO Safra Catz, deciding not to replace the late Mark Hurd.
“We have no plans for having a second CEO,” Ellison said Thursday during a conference call with analysts. He pointed to the company’s second-tier of executives, who are being groomed for future leadership. “Those people will be the next CEO when Safra and I retire, which will be no time soon.”
Bloomberg News reported in November that Oracle decided to hold off on naming a direct successor to Hurd and was instead focusing on grooming its leaders who are now running business divisions. Hurd had been co-CEO with Catz for five years before his death in October.
Additionally, Oracle gave a sales forecast for the current quarter that was in line with analysts’ estimates, signaling muted demand for the company’s software amid its uneven transition to cloud computing.
Revenue will increase 1% to 3% in the fiscal third quarter, Catz said Thursday on a conference call with analysts. Wall Street projected a 2.3% jump.
Earlier, the world’s second-largest software maker reported sales gained less than 1% to $9.61 billion in the period that ended Nov. 30, short of analysts’ projections of $9.65 billion. Shares declined 3% in extended trading after closing at $56.47 in New York. The stock has gained 25% this year.
Since Hurd’s death, Ellison and Catz have sought to reassure investors about the company’s stability, emphasizing Oracle’s advantage in the market for financial planning applications, where it’s seeing some of its strongest sales growth.
While Oracle has made little headway in its effort to compete with the biggest cloud companies to rent computing power and storage, it remains a leader in database software. Now, the company is betting on its new Autonomous Database, which runs without a need for human administrators, to spur revenue in the face of strong competition from Amazon.com Inc.’s cloud division.
After inconsistent sales growth the past five years, Catz pledged to investors in September that revenue would accelerate this fiscal year and next, and that earnings per share would grow by a double-digit percentage. To help reach that goal, the company that month announced a new artificial intelligence-driven operating system, as well as partnerships with software makers such as VMware Inc. and Box Inc.
In the fiscal second quarter, revenue from cloud services and license support climbed 2.6% to $6.8 billion. While that metric includes sales from hosting customers’ data on the cloud, a large portion is generated by maintenance fees for traditional software housed on clients’ corporate servers.
Cloud license and on-premise license sales decreased 7.5% to $1.13 billion in the period, suggesting the company is signing fewer new deals.
Profit, excluding certain items, was 90 cents a share, compared with analysts’ average estimate of 89 cents. In the current quarter, Oracle projected earnings of 95 cents a share to 97 cents a share. Analysts, on average, estimated 96 cents a share.
