Oracle Corporation (NYSE: ORCL) announced fiscal 2016 third-quarter results after the close of markets on Tuesday. The quarterly results marked the global computer technology corporation`s quarterly revenue miss while beat the earnings estimates at the same time. Oracle reported a 3 percent year over year decline in revenue to $9.01 billion in the period ends on February 28, which missed Thomson Reuters consensus estimates of $9.125 billion. The adjusted earnings per share is $0.64, beating the estimation of $0.62. It is said that the strengthening of the U.S. dollar compared to foreign currencies had a significant impact on Oracle`s quarterly results. Total revenue would have been up by 1 percent under constant currency.
Oracle`s revenue in the fast-growing cloud business increased 40 percent to $750 million, comparing with $527 million in the same period last year. This vigorous growth is mainly attributed to Oracle`s Cloud software as a service (SaaS) and platform as a service (PaaS). Larry Ellison, Oracle`s executive chairman and CTO, said in a statement that "In absolute dollar terms, Oracle is already selling more enterprise SaaS and PaaS new cloud revenue than any other company in the world". However, Oracle`s core software business, which currently made up 70 percent of its total revenue, decreased 4 percent in this quarter. In addition, Revenues in Oracle`s hardware products and software licenses business have dropped 13 percent and 15 percent respectively.
Oracle is working hardly to make business transformation. The company said that revenue growth will be accelerated in the following quarters as the high costs for starting up cloud services would begin to alleviate. Oracle also announced an additional $10 billion buyback authorization to reward shareholders despite a lack of growth. Yet analysts still quite concerned about its transition as competitions from Microsoft, IBM, Amazon and Google are really intense in cloud businesses.