Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  Equities  >  Nyse  >  Workday Inc    WDAY

WORKDAY INC (WDAY)
Mes dernières consult.
Most popular
  Report  
SummaryChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector newsTweets

Oracle blames sales force for Q3 miss, stock drops

share with twitter share with LinkedIn share with facebook
share via e-mail
0
03/21/2013 | 01:43am CET
File photograph of Oracle Corp headquarters Redwood City

SAN FRANCISCO (Reuters) - Oracle Corp blamed its rapidly expanding salesforce for a severe miss in third-quarter software sales and warned that its ailing hardware business will lose more ground this quarter, driving its shares 8 percent lower on Wednesday.

The world's No. 3 software maker projected a 1 to 11 percent rise in new software licenses and Internet-based subscriptions in the May quarter - an indicator of future performance. But investors focused on a 2 percent slip in the February quarter that badly missed Wall Street's targets.

Oracle's February quarter revenue miss was its worst since the November quarter of 2011.

"What we really saw was the lack of urgency we sometimes see in the sales force, as Q3 deals fall into Q4," Chief Financial Officer Safra Catz told analysts on a conference call.

"Since we've been adding literally thousands of new sales reps around the world, the problem was largely sales execution, especially with the new reps as they ran out of runway in Q3."

Wall Street remains concerned about tepid spending by governments and corporations in an uncertain global environment, but Catz dismissed those fears.

Oracle is also struggling with its hardware division and facing greater competition in cloud or Internet-based software from the likes of International Business Machines Corp and SAP AG and nimbler rivals like Salesforce Inc and Workday Inc.

Oppenheimer analyst Brian Schwartz said Oracle's May-quarter software sales projection was in line with expectations.

"That's probably a little hint that they've gotten off to a good start in Q4, that some of those deals that slipped in Q3 likely closed in Q4," Schwartz said.

WHITHER HARDWARE

Some investors still worry that governments and corporations around the globe may postpone spending on technology projects because of uncertainty over the economy, particularly in Europe.

"Business sentiment and confidence is way down. People are more cautious right now in business than they are in the stock market. That's how we get very high valuation multiples on stocks, but businesses are pulling back," said Richard Williams, an analyst at Cross Research.

Revenue from Oracle's hardware division, which it acquired through the $5.6 billion purchase of Sun Microsystems in 2010, fell to $671 million from $869 million in the year-ago quarter.

The division's revenue has fallen every quarter since it closed the Sun deal and Chief Executive Larry Ellison had said in December he expected hardware systems revenue to start growing in the fiscal fourth quarter.

Oracle projected its hardware product revenue for the current quarter would fall between 12 and 22 percent.

"There are areas that continue to be in transition, like the hardware business and the overall move to the cloud," said FBR Capital Markets analyst Daniel Ives. "They obviously hit a speed bump but the company is cautiously optimistic."

Oracle posted a 2 percent drop in new software sales and Internet-based software subscriptions to $2.3 billion in its fiscal third quarter. Investors scrutinize new software sales because they generate high-margin, long-term maintenance contracts and are an important barometer of future profit.

"It doesn't help that the sequester deadline is on the last day of our quarter, and so that has a little bit of an impact here in North America, but not necessarily anywhere else," Catz said. "The economy has been as it is in Europe for a while."

Oracle's revenue miss - about 4.4 percent below the average forecast - was its worst since the November quarter of 2011, when it fell short of target by 4.5 percent, according to Thomson Reuters data.

Next week, Oracle will start deliveries of its latest generation of servers, built with a record-breaking microprocessor, Ellison said.

Overall, Oracle's revenue dipped 1 percent to $9 billion, missing the $9.382 billion analysts had expected on average according to Thomson Reuters I/B/E/S.

GAAP net profit was unchanged at $2.5 billion. GAAP earnings per share were 52 cents, up 6 percent from the year-ago period. Its adjusted earnings per share were 65 cents, shy of 66 cents expected by analysts.

Shares in the software company fell 8 percent to $32.95 after hours, from a close of $35.765 on Nasdaq.

(Reporting by Noel Randewich; Editing by Richard Chang)

By Noel Randewich

Stocks mentioned in the article
ChangeLast1st jan.
INTERNATIONAL BUSINESS MACHINES CORPORATION 1.53% 155.52 Delayed Quote.-0.16%
ORACLE CORPORATION --End-of-day quote.
SALESFORCE.COM 1.73% 114.96 Delayed Quote.10.54%
SAP 0.02% 84.52 Delayed Quote.-9.56%
WORKDAY INC -1.11% 103.83 End-of-day quote.58.87%
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on WORKDAY INC
02/22WORKDAY : Ranks #2 Best Workplace in Ireland
GL
02/15WORKDAY, INC. : Change in Directors or Principal Officers (form 8-K)
AQ
02/15Workday Ranks #7 on Fortune’s List of 100 Best Companies to Work For
GL
02/08WORKDAY : Ventures Announces $250 Million Fund
AQ
02/08WORKDAY : Invests in Continued Growth with New Leadership Appointments
AQ
02/07WORKDAY, INC. (NYSE : WDAY) Files An 8-K Departure of Directors or Certain Offic..
AQ
02/07WORKDAY, INC. : Change in Directors or Principal Officers (form 8-K)
AQ
02/07WORKDAY : Ventures Announces $250 Million Fund
GL
02/07WORKDAY : Invests in Continued Growth with New Leadership Appointments
GL
01/18WORKDAY : expands security toolset with Duo partnership
AQ
More news
News from SeekingAlpha
2017Workday announces $1B senior note offering 
2017Workday Makes 2 Key Moves To Compete Against Salesforce.com 
2017ATLASSIAN DEEP DIVE : A Well-Deserved Premium, Cash Flow Story Brewing 
2017Competition Will Tear Workday Apart 
2017The Beginning Of The End Of Non-GAAP Earnings 
Financials ($)
Sales 2018 2 134 M
EBIT 2018 204 M
Net income 2018 -325 M
Finance 2018 1 933 M
Yield 2018 -
P/E ratio 2018 -
P/E ratio 2019
EV / Sales 2018 11,5x
EV / Sales 2019 9,08x
Capitalization 26 391 M
Chart WORKDAY INC
Duration : Period :
Workday Inc Technical Analysis Chart | WDAY | US98138H1014 | 4-Traders
Income Statement Evolution
Consensus
 
Mean consensus HOLD
Number of Analysts 40
Average target price 112 $
Spread / Average Target -11%
EPS Revisions
Managers
NameTitle
Aneel Bhusri Chief Executive Officer & Director
Robynne D. Sisco Co-President & Chief Financial Officer
Chano Fernandez Co-President
David A. Duffield Chairman
James J. Bozzini Chief Operating Officer
Sector and Competitors
1st jan.Capitalization (M$)
WORKDAY INC58.87%26 391
ADOBE SYSTEMS15.62%99 343
ELECTRONIC ARTS18.61%38 310
WORKDAY INC22.23%26 391
AUTODESK7.21%24 751
SQUARE INC29.51%17 136