Menu
Virus-led order delays hit Oracle sales numbers

Virus-led order delays hit Oracle sales numbers

Rival SAP also flagged postponed customer orders, which impacted its annual outlook.

Oracle posted quarterly revenue below Wall Street estimates on Tuesday as the coronavirus crisis led clients in the hospitality, retail and transportation sectors to postpone purchases, sending its shares about 3 per cent lower after the bell.

Customers from industries hit hardest by the pandemic pushed back orders as businesses tightened spending to battle a sagging economy. Rival SAP SE had also flagged postponed customer orders, which impacted its annual outlook.

“As the quarter progressed, we saw a drop-off in deals, especially in the industries most affected by the pandemic”, chief executive officer Safra Catz said on a post-earnings call.

However, many of the deal discussions have already resumed as countries have started to reopen their economies, Catz said.

Oracle, which earns the biggest chunk of its sales from cloud offerings and software licensing, did not provide any financial outlook for fiscal 2021.

The company, which has been pushing aggressively into the cloud computing market to make up for its late start, recorded quarterly sales of $6.85 billion in the unit that includes Oracle Cloud, missing estimates of US$6.98 billion.

Wedbush analyst Steve Koenig said Oracle’s cloud services revenue probably faced headwinds from lower spending by impacted industries such as retail, hospitality and transportation.

Revenue from the cloud license and on-premise license unit, which includes sales from the licensing of Oracle’s software products, dropped about 22 per cent to US$1.96 billion in the quarter, below estimates of US$2.11 billion.

Catz said the company also saw delayed payments as some customers were impacted by financial constraints due to the pandemic.

Total revenue fell about 6 per cent to US$10.44 billion for the fourth quarter ended May 31, missing analysts’ average estimate of US$10.63 billion, according to IBES data from Refinitiv.

On an adjusted basis, the Redwood, California-based company earned US$1.20 per share, above expectations of US$1.15 per share.

Reporting by Ayanti Bera in Bengaluru; Editing by Devika Syamnath



Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags Oracle

Events

Show Comments