December 12, 2019 / 9:45 PM / a month ago

Oracle misses revenue estimates; no new co-CEO plans

(Reuters) - Oracle Corp (ORCL.N) fell short of quarterly revenue estimates on Thursday as growth in its cloud services failed to counter declines in its traditional licensing business, and the company’s chairman said it had no plans to hire a new co-CEO.

FILE PHOTO: An exterior view of the Oracle Field Office at Wilson Boulevard in Arlington, Virginia, U.S., October 18, 2019. REUTERS/Tom Brenner

The company has been aggressively pushing into cloud computing to compensate for a late entry into the fast-growing business that helps companies move away from the more expensive traditional on-premise model.

Oracle has announced plans to hire 2,000 additional workers to roll out its cloud computing service to more locations to compete with bigger rivals Amazon.com’s (AMZN.O) Amazon Web Services and Microsoft Corp (MSFT.O).

In Oracle’s second quarter, revenue from cloud and on-premise license business fell 7% to $1.13 billion (£880.75 million), while revenue from cloud services and license support rose 3% to $6.81 billion.

In comparison, Amazon Web Services generated $8.99 billion, up 34% year-over-year, while Microsoft’s cloud revenue rose 36% to $11.6 billion in the October quarter.

“Oracle reported mixed results with subpar growth coming from its two main business segments. This cloud growth seems benign when we compare to its top competitors in the cloud space,” said Daniel Morgan, a portfolio manager at Synovus Trust Co.

The company’s shares fell 2.5% in extended trading. They have gained nearly 25% this year to Thursday close.

Chairman Larry Ellison said on a post-earnings call that there were no plans to hire a second CEO after former co-chief Mark Hurd died in October.

“How is our search going for the new — for a second CEO? We don’t have one. We have no plans for having a second CEO,” Ellison said.

Hurd and Safra Catz were named co-CEOs in 2014, after Ellison decided to step aside to focus on his role as chief technology officer.

The company said it expected third-quarter adjusted profit to be between 95 cents and 97 cents per share, assuming a currency headwind, while analysts were expecting 97 cents.

Total revenue rose to $9.61 billion in the second quarter, but fell short of analysts’ average estimate of $9.65 billion, according to IBES data from Refinitiv.

Excluding items, the company earned 90 cents per share, beating estimates of 88 cents.

Reporting by Amal S in Bengaluru; Editing by Sriraj Kalluvila

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