ORCL Oracle Corp

By Jay Greene 

Oracle Corp.'s quarterly cloud-computing revenue reached $1.57 billion, meeting the company's tamped down expectations following two periods in which investors knocked its shares lower over disappointing guidance for the key segment.

Even so, Oracle shares fell more than 3% in after-market trading because investors thought healthy tech spending would push revenue higher.

"It'd definitely somewhat disappointing that they didn't show upside, given the healthy spending environment," said Stifel Nicolaus & Co. analyst Brad Reback.

Meanwhile, the company swung to a quarterly loss as it booked a net charge of $6.9 billion related to the U.S. tax overhaul in its fiscal third quarter.

Cloud computing is key for Oracle, which is transitioning from a leading vendor of database software companies run in their own servers to one that also sells services that customers run in data centers operated by Oracle and others.

The business-software giant Monday reported total cloud sales grew 32% in the quarter, roughly what the company said it would be three months ago.

Oracle disappointed investors in its fiscal first and second quarters with guidance for its cloud-computing business that was below what Wall Street had expected. While the stock fell each time, it recovered and managed to close at an all-time high of $52.97 earlier this month.

Over all, Oracle reported a net loss of $4.02 billion, or 98 cents a shares. The company said adjusted per-share earnings, which exclude stock-based compensation and other items, were 83 cents.

Revenue rose 6% to $9.77 billion, while adjusted revenue climbed 5% to $9.78 billion.

According to estimates gathered by S&P Global Market Intelligence, analysts expected Oracle to earn 72 cents a share on an adjusted basis, on adjusted revenue of $9.78 billion.

Oracle's software-as-a-service business, in which it sells access to web-based applications that compete against offerings from Salesforce.com Inc. and Workday Inc., grew 33% to $1.15 billion.

Its platform-as-a-service business -- app-management and data-analytics tools -- combined with infrastructure-as-a-service -- computing resources and storage on demand -- climbed 28% to $415 million. It competes in those markets against Amazon.com Inc. and Microsoft Corp.

While growth in Oracle's overall cloud business has decelerated, it still grew faster than the declines in its legacy software business. The cloud business grew $377 million year-over-year while Oracle's new software-license revenue fell $26 million.

Overall, revenue from new software licenses fell 2%, or 6% on a currency-adjusted basis, to $1.39 billion.

As important as shifting sales to the cloud is for Oracle, the roughly half of its revenue comes from software-license updates and product support. In the third quarter, that business grew 6% to $5.03 billion.

Write to Jay Greene at Jay.Greene@wsj.com

(END) Dow Jones Newswires

March 19, 2018 16:58 ET (20:58 GMT)

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