Oracle stock drops after software firm misses revenue mark

Oracle stock drops after software firm misses revenue mark
Shares of Oracle (ORCL) were lower after the enterprise information technology company, looking to catch up in offering more cloud services and systems, reported a first-quarter revenue miss.

The company’s cloud license and on-premise license business was the biggest disappointment in the quarter with revenue falling 8 per cent to $813 million (U.S.).

Total quarterly revenue was up 4 per cent overall to $9.73 billion, short of analyst expectations of $9.76 billion.

“Taken together, IaaS and SaaS are Oracle’s fastest growing and highest margin new businesses,” Oracle Chief Executive Safra Catz said in a statement.

“As these two cloud businesses continue to grow, they will help expand our overall profit margins and push earnings per share higher.”

Shares of Oracle were falling 3 per cent premarket to $86.19 at last check.

Catz also noted that that the company’s two new cloud businesses, IaaS and SaaS, now account for more than 25 per cent of the company’s total revenue with an annual run rate of $10 billion.

Meanwhile Larry Ellison, Oracle’s chairman and chief technology officer, said the Austin company is poised to become one of the leading cloud infrastructure companies.

“Last quarter, we released the next generation of the world’s most popular open source database,” Ellison said.

“Many customers measured our new MySQL cloud service to be much, much faster, less expensive, and easier to use than Snowflake (SNOW), Aurora, RedShift and other commonly used cloud databases.”

With the COVID-19 pandemic accelerating companies’ shift online, Oracle is playing catch-up with internet giants, (AMZN) Microsoft (MSFT) and Alphabet’s Google (GOOGL) in the race to offer more and more cloud services and systems.
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