Oracle Corporation Earnings Disappoint Due To Currencies

Oracle released the earnings results from its fourth fiscal quarter of 2015 after closing bell tonight. The company posted non-GAAP earnings of 78 cents per share on revenue of $10.7 billion. Analysts had been looking for earnings of 87 cents per share on $10.95 billion in revenue.

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Key metrics from Oracle’s earnings report

Oracle said its earnings were “significantly impacted” by currency headwinds. GAAP earnings were 62 cents per share, which was a 23% decline overall and a 12% decline in constant currency.

The company’s revenue declined 5% overall but increased 3% in constant currencies. Revenue from Software and Cloud declined 6% but rose 2% on a constant currency basis to $8.4 billion. Cloud software-as-a-service and platform-as-a-service recorded revenue of $416 million, a 29% growth rate but 35% growth in constant currency.

Revenue from Cloud infrastructure-as-a-service increased 25% (or 31% in constant currency) to $160 million. Revenues from Hardware systems declined 4% but rose 5% in constant currency to $1.4 billion.

“We sold an astonishing $426 million of new SaaS and PaaS annually recurring cloud subscription revenue in Q4,” Oracle CEO Safra Catz said in a statement. “We expect our rapidly increasing cloud sales to quickly translate into significantly more revenue and profits for Oracle Corporation (NYSE:ORCL). For example, SaaS and PaaS revenues grew at a 34% constant currency rate in our just completed Q4, but we expect that revenue growth rate to jump to around 60% in constant currency this new fiscal year.”

Oracle had guided for $300 million in new SaaS and PaaS annually recurring cloud subscription revenue.

The company also reported $7.2 billion in short-term deferred revenues.

Oracle provides guidance

In the 2016 fiscal year, Oracle Executive Chairman and CTO Larry Ellison said they expect to sell between $1.5 billion and $2 billion in new SaaS and PaaS business. He said this goal would put Oracle ahead of, inc. (NYSE:CRM)’s current goal. Also the goal represents about a 60% growth rate in constant currency, whiles Salesforce is targeting a 20% growth rate.

Shares of Oracle plunged in after-hours trades, falling as much as 6.81% to $41.85 per share.


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