Software company reports higher profit but disappointing revenue for quarter
By Maria Armental
Oracle Corp. said it won't replace its late co-CEO, Mark Hurd, leaving Safra Catz as the sole top executive leading the software giant after years of operating with an unusual, two-chief structure.
In the company's first earnings report since Mr. Hurd's death in October, Oracle founder and Chairman Larry Ellison said it is working to strengthen its management team, to build develop a group of executives who are "potential CEOs when both Safra and I retire, which is not anytime soon." But he described the two-CEO setup as unusual and not something Oracle is looking to repeat.
Ms. Catz now leads Oracle as sole CEO. Company co-founder Larry Ellison, who ceded the CEO post to Mr. Hurd and Ms. Catz in 2014, remains active as chairman and chief technology officer.
The twin-CEO structure has had a mixed record at the small number of companies that have tried it. But two of Oracle's rivals, Salesforce.com Inc. and SAP SE have also adopted it over the past two years.
The Silicon Valley company, best known for its corporate database software, reported $9.61 billion in revenue for the quarter ended Nov. 30, missing analysts' projected $9.65 billion, according to FactSet.
Profit for the second quarter rose to $2.31 billion, or 69 cents a share. Excluding stock-based compensation and other items, profit rose to 90 cents a year, from 80 cents a share a year earlier.
Analysts surveyed by FactSet expected a profit of 68 cents a share, or 89 cents a share as adjusted.
For the current quarter, Oracle gave a somewhat muted outlook. It projected adjusted profit of 95 cents to 97 cents a share compared with analysts' projected 97 cents. Sales, Oracle said, would rise roughly 2%, broadly in line with analysts' projections.
The company said it is seeing strong demand and higher conversion rates and expects strong momentum in the second half of this fiscal year to carry through 2021.
Oracle deftly navigated constant technological changes since it was founded in 1977; but in the era of cloud computing, it has been playing catch-up to the likes of Amazon.com Inc., Microsoft Corp. and Alphabet Inc.'s Google.
In the most recent quarter, Oracle reported a combined $7.94 billion cloud and license revenue, just shy of analysts' projections of roughly $8 billion.
Oracle has been trying to introduce new features to its cloud, including greater automation, to help lure customers away from other vendors, in particular market leader Amazon.
This month, the company added to its board Vishal Sikka, founder and chief executive of artificial-intelligence company Vianai Systems and a SAP and Infosys Ltd. veteran, highlighting Mr. Sikka's experience in AI and machine learning.
Shares, which have been trading near record levels in recent months, closed Thursday at $56.47 and fell 2.6% in after-hours trading.
Write to Maria Armental at email@example.com