Dive Brief:
- Oracle’s third-quarter profit forecast did not meet analysts' expectations, Reuters reports.
- Company officials said their shift from licensing software to cloud-based subscriptions has squeezed its margins.
- The cloud computing portion of the company was up 34%, however.
Dive Insight:
The company forecast third-quarter profit of about 63-66 cents per share, with revenue flat or up 3%. That translates to $9.33 billion-$9.61 billion. Analysts on average were expecting profit of 65 cents per share on revenue of $9.28 billion, according to Thomson Reuters I/B/E/S.
"This is a softer outlook than the Street was expecting and speaks to the massive growth challenges ahead," FBR Capital Markets analyst Daniel Ives told Reuters.
There was some good news in the cloud portion of Oracle’s business. In the second quarter ended Nov. 30, revenue from the company's cloud-computing software and platform service rose 34% to $484 million.
It’s been a tough year for Oracle overall. The company’s stock has fallen 13.5% this year.
