Oracle shares slipped nearly 5 percent in extended trading on Monday after the company reported fiscal first-quarter sales that failed to meet the estimates of analysts.
Oracle reported earnings of 71 cents per share, excluding specific items, against 69 cents estimated by analysts. Meanwhile, revenue was at $9.19 billion, which missed the $9.28 billion expected by the analysts.
Oracle has now come in below estimates for revenue in two of the most recent fiscal quarters.
Revenue gained 1 percent from a year earlier in the quarter that ended August 31, the company said in a statement.
Under its revised reporting structure, Oracle generates the major portion of its money from the segment that it tags as cloud services and license support. The segment whipped out $6.61 billion in revenue, climbing 3.2 percent from the previous year. Analysts had been expecting the segment to reach $6.68 billion in revenue, according to FactSet.
The cloud license and on-premises license generated revenue of $867 million, compared with the estimated $865 million among analysts.
Hardware revenue came in at$904 million, while services revenue reached $813 million.
Last week, analyst at KeyBanc Capital Markets revised their estimates downward for Oracle’s next few quarters.
“Oracle’s move to the cloud is taking longer than expected, is consistent with what we have heard from the channel, and with reduced disclosures, we have lesser visibility into the company’s progress,” they said.
Earlier this year, Oracle stopped disclosing how much money it was generating from cloud infrastructure and platform offerings.
During Oracle’s conference call with analysts on Monday, co-CEO Safra Catz said the company will post 77 to 79 cents in earnings per share, excluding certain items, during the fiscal fourth quarter.
According to analysts that were surveyed, Oracle is expected to forecast 79 cents in earnings per share, not including specific items, for that period. Catz said that she expects Oracle’s revenue to be flat up to 2 percent on a year-over-year basis in the fiscal second quarter.
“On a constant currency basis, ORCL can argue that it met expectations, but this market has no patience for any misses from tech companies, no matter how minor or how explainable the miss,” said Steve Koenig, who is the managing director at Wedbush Securities.
Oracle stated that its board allowed the company to spend $12 billion more on share buybacks.
“We think our stock is an unbelievable buy, so we are buying it back,” Catz said “…At these prices, with our growing cash flows, with our earnings growing like they are, it seems like an amazing deal to buy our stock. So we’re putting our money where our mouth is, frankly.”
Analyst had expected Oracle to increase its quarterly dividend, but the company didn’t deliver.
Oracle shares are higher 4 percent this year as of Monday’s close. The stock slumped 4.8 percent to $46.84 after hours.
During the first quarter, the company announced the availability of a new cloud-based data-processing service and the extension of its tie-up with the European Organization for Nuclear Research.