Yesterday, Oracle Corporation (NYSE:ORCL) reported its fiscal first quarter results. The company earned 59 cents a share, beating the consensus estimate of 56 cents per share. However, its first quarter revenues of $8.38 billion fell short of Wall Street expectations of $8.48. The world's second largest software maker issued second quarter earnings and revenue guidance that missed analysts' expectations.
Smaller firms challenging Oracle
Oracle Corporation (NYSE:ORCL) is facing stiff competition from smaller rivals. Small software companies are offering internet-based products and software at competitive prices. The Larry Ellison-led company is also battling weak global IT demand. For the second quarter, Oracle Corporation (NYSE:ORCL) expects new software and subscriptions revenue growth to range between -4% and 6%. Wall Street follows new software sales closely because they bring long-term, high margin contracts, thus indicate future earnings potential.
The company estimates second quarter non-GAAP EPS of 65-70 cents per share, compared to the consensus estimate of 69 cents. Overall revenues are expected to grow at 1% to 4% during the current quarter. That translates between $9.02 billion and $9.29 billion, reports Noel Randewich of Reuters.
Oracle CEO misses the conference call
Oracle Corporation (NYSE:ORCL) issued its second quarter forecasts at a conference call after announcing its Q1 earnings on Wednesday after the bell. However, Oracle Corporation (NYSE:ORCL) CEO Larry Ellison missed the conference call to attend his sailing team, Oracle Team USA's match against the New Zealand team. Ellison is set to launch the In-Memory Option for the Oracle Corporation (NYSE:ORCL) database at the oracle OpenWorld next week.
Oracle Corporation (NYSE:ORCL) is shifting its focus to cloud computing as its software and hardware businesses face growth challenges ahead. According to a survey conducted by Barclays Plc. (LON:BARC) (NYSE:BCS), global IT spending is expected to remain flat in the second half of this year. Analysts expect Oracle Corporation (NYSE:ORCL) to become more competitive with increased focus on cloud computing.
Oracle Corporation (NYSE:ORCL) shares were down 0.94% to $33.55 in the early trading session. The stock is up 2.57% this year so far.