Oracle Corporation (NYSE:ORCL) posted 3Q sales that missed analysts’ forecasts, hurt by a strong U.S. dollar and poor demand for its cloud software. The revenue in 3Q came at $9.33 billion, lower than the analysts’ expectations of $9.47 billion. The company reported profit of 68 cents a share excluding certain costs, which was in line with analysts forecasts. The net income declined to $2.5 billion from $2.57 billion, in the same quarter, a year ago.
The impact of currency
Oracle revenue was hurt by as much as 6% due to a strong dollar. The company intends to expand into corporate cloud segment. As of now, it has failed to outperform its peers including salesforce.com, inc. (NYSE:CRM) and Workday Inc (NYSE:WDAY) in offering business software and services through the internet. The company is in transition phase, and it comes as a relief to investors. The cloud business is growing at a good pace than expected. The company expects to sell more in the cloud segment compared to last year.
Oracle boosted its dividend by 25% to 15 cents per share compared to the previous payout of 12 cents a share. It last raised dividend back in FY2013. The company develops databases and other software that assists big companies store, sort, organize and analyze digital information.
Larry Ellison, the Chief Technology Officer of Oracle Corporation (NYSE:ORCL), stated that the company expects to generate more revenue from cloud-based systems. For 4Q, the company expects to report profit before certain costs in a range of 90 cents-96 cents per share. The sales growth is expected to be between 1% and 6%. The estimates do not account for currency fluctuations. The foreign-exchange rates have been unfavorable for the entire industry. In last fiscal year, Oracle reported 56% of total revenue from the overseas market. A stronger U.S. dollar indicates that overseas revenue translate into fewer dollars when recorded in the U.S.