Oracle Q4 Profit Rises - Update

(RTTNews) - Business software giant Oracle Corp. (ORCL), Thursday reported an increase in profit for the fourth quarter, despite lower revenues. Nevertheless, earnings for the quarter fell short of Wall Street estimates by a penny, while revenues trumped expectations.

Redwood Shores, California-based Oracle's fourth-quarter profit rose to $2.81 billion or $0.66 per share from $2.76 billion or $0.62 per share last year.

Adjusted earnings for the quarter rose to $0.81 per share from $0.78 per share last year. Analysts polled by Thomson Reuters expected earnings of $0.82 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter dropped 1 percent to $10.59 billion from $10.71 billion last year. Analysts had a consensus revenue estimate of $10.47 billion for the quarter.

Oracle noted that strong U.S. dollar impacted its earnings per share by $0.02, while revenues would have been flat on a constant currency basis.

Oracle' revenue growth has slowed down in the last few quarters, raising investor concern about the company's ability to transition from its traditional approach of licensing software to the so-called cloud computing method.

Oracle's total cloud and On-Premise software revenues were flat at $8.44 billion, while hardware revenues slipped 9 percent to $1.28 billion. Total services revenues dropped 3 percent to $872 million.

"Fourth quarter SaaS and PaaS revenue growth accelerated to 68% in constant currency, significantly higher than my guidance," said Oracle CEO, Safra Catz. "SaaS and PaaS gross margins continued to improve throughout the year, exiting FY16 at 56%. Bookings in Q4 were also very strong enabling us to raise our guidance for Q1 SaaS and PaaS revenue growth, which we now expect to be between 75% and 80%."

"We added more than 1,600 new SaaS customers and more than 2,000 new PaaS customers in Q4," said Oracle CEO, Mark Hurd.

Oracle also declared a quarterly dividend of $0.15 per share, payable to shareholders on July 6.

ORCL closed Thursday's trading at $38.64, up $0.20 or 0.52%, on the Nasdaq. The stock further gained $1.11 or 2.87% in the after-hours trade.