Oracle Stock Crashes 8 Percent After Earnings Miss

March 20, 2013

Shares of Oracle Corp. (NASDAQ:ORCL) declined as much as 7.5 percent in post-market trading on Wednesday. The crash is the result of a third-quarter earnings report that fell way short of expectations.

Total revenue contracted 1 percent year over year to $8.958 billion, and does not compare favorably to expectations for $9.38 billion. This contraction was led by a 23 percent year-over-year decline in hardware revenues, which fell to $671 million. Non-GAAP earnings increased 5 percent on the year to $0.65 per share, just 1 cent shy of expectations.

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Quarter	Nov. 30, 2011	Feb. 29, 2012	May. 31, 2012	Aug. 31, 2012	Nov. 30, 2012	Feb. 29, 2013	May. 31, 2013*
Revenue ($) in millions	8,792	9,039	10,920	8,181	9,094	8,958	11,520
Diluted EPS ($)	0.43	0.49	0.68	0.41	0.53	0.52	0.88

*Average analyst estimate

“Our non-GAAP operating margin increased to a Q3 record of 47 percent, and we expect it to reach an all-time high for the fiscal year,” said Oracle President and CFO, Safra Catz, in a statement. “Both operating cash flow and free cash flow were at record levels for a Q3, with operating cash flow of $13.7 billion over the last twelve months.”

Revenue from new software licenses and cloud subscriptions fell 2 percent on the year to $2.3 billion. This in particular was a blow to the tech giant because they had forecast 3 to 13 percent growth.

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