Updated from 4:31 p.m. EST to provide executive comments regarding third-quarter guidance.
NEW YORK (
) -- Shares of
tumbled in extended trading on Tuesday after the company reported disappointing quarterly results.
The database giant reported non-GAAP earnings $2.8 billion, or 54 cents per share, for its fiscal second quarter ended Nov. 30 on revenue of $8.8 billion, below the average estimate of analysts polled by
for earnings of 57 cents a share in the three-month period on revenue of $9.23 billion.
Oracle posted its second-quarter numbers after market close on Tuesday.
Software revenue rose 7% year-over-year to $6.03 billion, but Oracle reported a decline of 10% in revenue from hardware systems products and support to $1.58 billion from a total of $1.75 billion last year. Services revenue was flat at $1.18 billion.
For the third quarter, Oracle said it expects total revenues to be up 3%-7% year-over-year in constant currency, and 1%-5% in U.S. dollars. Further breaking that down, it expects new software license revenue to be up 2%-12% on a constant currency basis, and flat to up 10% in U.S. dollars. It also expects hardware product revenue to decline between 4 and 14% on a constant currency basis and between 5% to 15% in U.S. dollars.
The company expects adjusted earnings of 56 to 59 cents per share in its fiscal third quarter, or 55 to 58 cents per share in U.S. dollars. The current average analysts' view is for earnings of 58 cents per share in the February-ending quarter.
Oracle said it saw an increase in additional approvals for expected deals in the last few days of the quarter, but added that it now has operating metrics in place to handle potential delays. CFO Safra Catz said that she does not expect the third quarter to be a repeat of this. The company is not seeing a slowdown in European sales, but just an increase in approval processes.
"Sales of our engineered systems accelerated in Q2," said Larry Ellison, Oracle's CEO, in the press release. "Exadata growth was well over 100% compared to last year, and Exalogic grew more than 100% on a sequential basis." Ellison noted Oracle sold over 200 Exadata and Exalogic systems during the quarter. In the third quarter it plans to sell over 300, and 400 in the fourth quarter, which would represent $1 billion in revenues.
Some key Exalogic customers in the second quarter were the University of Melbourne, the FDA and Amway. Ellison also noted that a "very large American smartphone maker has over 30 Exadata systems and a large European bank has 24 Exadata systems." The company said that Exalogic is running faster than Exadata in terms of demand.
Oracle had $31 billion in cash and marketable securities as of the end of the second quarter. It also purchased $1 billion worth of stock during the quarter. The board of directors authorized an additional $5 billion share buyback program, and announced a a quarterly dividend of 6 cents per share, payable to shareholders as of January 11, 2012.
Shares were sharply lower in late trades, down 9.5% to $26.50 on volume of more than 5.92 million, according to
Written by Chris Ciaccia in New York
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