By RTT News, March 20, 2013, 05:13:00 PM EDT
(RTTNews.com) - Oracle Corp. ( ORCL ) said Wednesday after the markets closed that its third quarter profit remained essentially flat with last year's level, as lower expenses and income tax provision offset a slight decline in revenue.
However, the company's quarterly earnings per share, excluding items, came in below analysts' expectations as did its quarterly revenue.
Oracle shares are currently losing 7.42% in after hours trading after closing the day's regular trading session at $35.76, up 8 cents. The shares trade in a 52-week range of $25.33 to $36.43.
Oracle's total software revenues for the third quarter increased 4% year-over-year to $6.7 billion. However, new software licenses and cloud software subscriptions revenues fell 2% to $2.3 billion.
Third quarter software license updates and product support revenues grew 7% year-over-year to $4.3 billion. Service revenues for the quarter fell 8% from last year at $1.0 billion.
Hardware systems revenues for the quarter dropped 16% at $1.2 billion, with hardware systems products revenue down 23% and hardware systems support revenue down 6%.
"The Oracle Cloud is the most robust and comprehensive cloud platform available with services at the infrastructure (IaaS), platform (PaaS) and application (SaaS) level," said Oracle President, Mark Hurd. "In Q3, our SaaS revenue alone grew well over 100% as lots of new customers adopted our Sales, Service, Marketing and Human Capital Management applications in the Cloud."
Oracle's acquisition-led growth strategy continues to pay dividends. The company has acquired more than 70 companies since 2005. Of late, Oracle has set its eyes on cloud-based software firms. In January 2012, the company completed the acquisition of RightNow Technologies, Inc. for $1.5 billion in an effort to offer a broader range of cloud solutions to its customers. The company completed its $1.9 billion acquisition of Taleo Corp. in April last year.
Oracle has recently signed deals to buy SelectMinds, Instantis and DataRaker, Eloqua, Inc. (ELOQ). Last month, Oracle agreed to buy network gear maker Acme Packet, Inc. ( APKT ) for $29.25 per share in cash or about $1.7 billion, net of cash.
For the third quarter ended February 28, 2013, Redwood Shores, California-based Oracle reported net income of $2.5 billion or $0.52 per share, compared to $2.5 billion or $0.49 per share for the year-ago quarter.
Excluding items, adjusted net income for the third quarter was $3.1 billion or $0.65 per share, compared to $3.1 billion or $0.62 per share in the prior year quarter.
On average, 36 analysts polled by Thomson Reuters expected the company to earn $0.66 per share for the third quarter. Analysts' estimates typically exclude special items.
Operating margin for quarter remained flat with last year at 37%, while adjusted operating margin improved to 47% from 46% last year.
Total revenue for the third quarter declined 1% to $8.96 billion from $9.04 billion a year ago, while adjusted revenue for the quarter also declined 1% to $8.97 billion from $9.06 billion last year. Thirty-five analysts had a consensus revenue estimate of $9.38 billion for the third quarter.
Without the impact of a stronger U.S. dollar, third quarter revenue would have been up 1% and earnings per share would have been up 8%, the company said.
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