NEW YORK ( TheStreet) -- Oracle (ORCL - Get Report) on Wednesday posted quarterly earnings of 65 cents a share on revenue of $8.97 billion, falling short of Wall Street's estimates.
The three dozen analysts who follow the stock were expecting earnings of 66 cents on revenue of $9.39 billion. The company had beaten estimates by a few cents during the two previous quarters, so optimism was running high.
The disappointment was palpable. The stock traded above $36 earlier in the day, closing the regular session at $35.76. By the end of the company's conference call, around 6 p.m. New York time, it was down to $32.76.
Oracle said hardware sales dropped 23% to $671 million from a year earlier. New license sales were also disappointing, down 2% including cloud subscriptions. The improvements were in license renewals and product support, up 7% to $4.3 billion.
On the conference call, Oracle's top management insisted the company is on track. Executives blamed the poor results on currency changes, the sequester and new products to be released in the coming quarter, forestalling sales of older technology.
Co-President and CFO Safra Catz said some sales from the third quarter jumped into the fourth, but have now closed, adding that Oracle's fourth quarter, which it's now in, is usually its strongest. She projected GAAP earnings will be in the range of 72-78 cents per share in the current quarter, and that revenue growth could hit 4%.
"We feel great about our strategy," Co-President Mark Hurd said. "Our win rate went up" on competitive deals. He ticked off a list of new cloud customers, including
CEO Larry Ellison said the company's newest hardware, to be announced next week, will provide up to 10 times the performance of what it replaced. "We think the fourth quarter will be better than the third quarter, but we expect the real turnaround in the first quarter of 2014," as the company's performance claims are verified by customers.
Despite the happy talk, the sales shortfall sent the stock tumbling about 8% in after-hours trading, the lowest for the year.