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TheStreet Open House

Oracle Shares Recover After Top-Line Miss (Update 1)

Stocks in this article: ORCL

Updated from 4:10 p.m. EST to provide executive comments regarding second-quarter guidance in the fifth paragraph.

NEW YORK ( TheStreet) -- Shares of Oracle (ORCL) were lower in late trades after the software giant missed Wall Street's revenue view for its latest quarter by a wide margin.

The Redwood Shores, Calif.-based software giant generated non-GAAP earnings of $2.6 billion, or 53 cents a share, for the three months ended in August on revenue of $8.18 billion. The average estimate of analysts polled by Thomson Reuters was for the company to report a profit of 53 cents per share on revenue of $8.42 billion.

The company cited foreign currency fluctuations during the quarter as a hit to earnings. On a constant currency basis, Oracle said its first-quarter earnings would've been 3 cents higher, and revenue would've been higher by 3%, both on a non-GAAP basis. New software licenses and cloud software subscriptions revenues would have been up 11% on a Non-GAAP basis, while hardware systems products revenues would have been down 21%.

"On a non-GAAP basis, new software licenses and cloud software subscriptions sales grew 11% in constant currency and operating margin increased to 44% in Q1," said Oracle President and CFO, Safra Catz. "Q1 operating cash flow increased to a record high of $5.7 billion. We're off to a good start in the new year."

On the earnings call, CFO Safra Catz gave guidance for the coming quarter. New software revenue is expected to be up between 6% and 16% on a non-GAAP basis, while hardware revenue is expected to decline between 8% and 18%. Total revenue growth is expected to be between 1% and 5% in constant dollars, with non-GAAP earnings are seen ranging from 59 to 63 cents a share. Analysts polled by Thomson Reuters expect earnings of 61 cents per share on $9.225 billion in sales.

The company also announced its quarterly dividend of 6 cents per share, which will be paid to shareholders as of October 12, 2012, with a payment date of November 2, 2012.

Shares of Oracle finished the regular session down 1.5% at $32.26. The stock was last quoted at $32.27, up a penny, on volume of nearly 3 million, according to Nasdaq.com. Earlier, the shares ran as low as $31.05 in extended trades.

Interested in more on Oracle? See TheStreet Ratings' report card for this stock.

-- Written by Chris Ciaccia in New York

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