Oracle shares fall on weak 3rd-quarter report

NEW YORK (AP) — Oracle Corp. on Wednesday reported flat earnings for its fiscal third quarter, hurt by a continued drop in sales of hardware systems and a surprise decline in sales of new software — which the company attributed to a lackluster performance by its expanding sales force rather than lack of demand.

“While our overall business remains healthy and we saw excellent pipeline growth we’re not pleased with our revenue growth this quarter,” said Safra A. Catz, president and chief financial officer, in a conference call with analysts.

She added that Oracle saw a “lack of urgency” in its sales force during the quarter that pushed deals into the fourth quarter from the third. Shares of the business software bellwether tumbled in after-hours trading on the weaker-than-expected results.

Hardware systems revenue dropped 16 percent. Revenue from new software licenses and online or “cloud” subscriptions, a closely watched figure, fell 2 percent year-over-year to $ 2.3 billion. The company had predicted that number would rise by 3 percent to 13 percent. Oracle, like other established software companies, is facing increasing competition from rivals that sell software as a subscription service rather than a packaged product.

Oracle said it has been adding thousands of new sales reps around the world — and they need to be trained more on hitting quarterly rather than annual targets. That said, the company was also conservative with its fourth-quarter guidance.

As one of the world’s largest makers of business software, Oracle’s numbers help Wall Street gauge the direction of corporate technology budgets. When Oracle’s earnings are lackluster, it’s often a sign that companies are concerned about the economy.

But Oracle also depends on international markets for a major part of its revenue. Europe’s economy is still limping amid worries about unwieldy government debts and China’s economic growth has been slowing. That said, Forrester analyst Andrew Bartels thinks it will take earnings reports from other technology vendors before it becomes clear whether the problem is Oracle-specific or reflects broader demand. He thinks it’s likely both.

He said it was unfortunate that Oracle’s quarter included all the worry about the ‘fiscal cliff.’ December was filled with concern about the automatic tax increases and spending cuts that threatened to drag the U.S. back into a recession until the issues were partially resolved on Jan. 1.

The company also faces the challenge of drumming up demand for Fusion, its new, cloud-based applications business, Bartels said, since many of its customers are content using its older Applications Unlimited program.

Oracle earned $ 2.5 billion, or 52 cents per share, in the December-February quarter. That compares with $ 2.5 billion, or 49 cents per share, in the same period a year earlier, when it had more shares outstanding. Adjusted earnings totaled 65 cents per share in the latest quarter.

Revenue slid 1 percent to $ 8.96 billion from $ 9.04 billion, hurt in part by the stronger dollar.

Analysts polled by FactSet had expected earnings of 66 cents per share, excluding charges for past acquisitions and other costs, on revenue of $ 9.38 billion.

“Looking forward we’re encouraged by the tremendous pipeline growth,” Catz said. “But clearly we have work to do in training new reps on managing the sales process and (on the) importance of establishing a quarterly rhythm” with their deals.

For the current quarter, Oracle expects new software license and online subscription revenue to grow by 1 percent to 11 percent year-over-year. The company is forecasting total revenue to range between a decline of 1 percent to an increase of 4 percent and adjusted earnings to range from 85 cents to 91 cents per share.

Analysts are expecting adjusted earnings of 88 cents per share and revenue of $ 11.5 billion, an increase of 5 percent. Oracle called its guidance conservative.

Shares of the Redwood City, Calif., company fell $ 2.56, or 7.2 percent, to $ 33.20 in after-hours trading following the announcement. The stock had closed the regular session up 8 cents at $ 35.76 before the report.

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Infinity takes bigger 4Q loss as payments fall

CAMBRIDGE, Mass. (AP) — Infinity Pharmaceuticals Inc. said Tuesday it took a bigger loss in the fourth quarter as its drug development costs rose and payments decreased.

The company does not have any approved drugs, and its research and development costs climbed 34 percent as it continued clinical testing of two drugs. One drug candidate, IPI-504, is in early- and mid-stage studies as a treatment for lung cancer. The other, called IPI-145, is in mid-stage testing as a treatment for asthma and early-stage testing as a treatment for blood cancers and rheumatoid arthritis.

During the latest quarter, Infinity lost $ 47 million, or $ 1.15 per share, with no revenue. In the year-earlier quarter it took a loss of $ 14.1 million, or 53 cents per share. During that period it received $ 22.3 million from a partnership with Purdue Pharmaceutical Products. The company’s research costs grew to $ 40 million from $ 29.9 million year over year.

Analysts expected Infinity to take a loss of 84 cents per share, according to FactSet.

IPI-145 is designed to block enzymes that are involved in immune cell functions, and IPI-504 is designed to make other cancer drugs more effective by blocking a protein that is critical to cancer cell growth, survival, and proliferation.

The company took a loss of $ 54 million, or $ 1.70 per share, in 2012 after losing $ 40 million, or $ 1.50 per share, in 2011. Revenue from the Purdue collaboration declined to $ 47.1 million from $ 92.8 million.

Infinity Pharmaceuticals shares declined 32 cents to $ 45.14 Tuesday. The stock is trading at its highest price since early 2001, and peaked at $ 46.81 during the day.

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DragonWave cuts revenue estimate as sales fall in Nokia Siemens unit

(Reuters) – Telecom network equipment maker DragonWave Inc said revenue for the fourth quarter would miss its forecast, citing lower revenue from the microwave technology business it bought from Nokia Siemens Networks last year.

The Canadian company estimated revenue of $ 30 million for the quarter ended February 28. It had forecast $ 40 million to $ 45 million.

(Reporting by Krithika Krishnamurthy in Bangalore; Editing by Don Sebastian)

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BroadSoft forecasts lower current-quarter revenue; shares fall

(Reuters) – Internet communications company BroadSoft Inc forecast current-quarter revenue below analysts’ estimates, sending its shares down 24 percent after market.

BroadSoft, which sells software that telecom companies use to provide voice and video services, forecast first-quarter revenue of $ 37 million to $ 40 million, while analysts were expecting $ 43.6 million on average.

The company said it expects its growth to be affected by weakness in its consumer applications division prior to service providers ramping up their voice-over-LTE investment.

Consumer applications are part of the company’s license software business, which accounts for more than half of its total revenue.

Network operators globally are currently in a multi-year investment cycle to upgrade mobile networks to a 4G technology known as LTE, which offers up to 10 times faster download speeds.

BroadSoft’s fourth-quarter results, however, were above analysts’ expectations. Excluding one-time items, the company earned 47 cents per share, ahead of analysts’ expectations for 41 cents per share.

Revenue rose 13 percent to $ 45.8 million, also ahead of the $ 45.7 million Wall Street had estimated, according to Thomson Reuters I/B/E/S.

Net income fell to $ 4.9 million, or 17 per share, from $ 5.5 million, or 19 cents per share, a year earlier.

Shares of the Gaithersburg, Maryland-based company fell to $ 23.42, after closing at $ 30.91 on Wednesday on the Nasdaq.

(Reporting by Neha Alawadhi in Bangalore; Editing by Sreejiraj Eluvangal)

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Airbus parent EADS sees Q4 earnings fall

BERLIN (AP) — Airbus parent company EADS NV posted a 47 percent drop in fourth-quarter net profit Wednesday after taking costly charges at its helicopter and defense electronics divisions.

The aerospace giant earned €325 million ($ 425 million) in the October-December period, down from the previous year’s €612 million.

But full-year earnings were up 19 percent at €1.23 billion from €1.03 billion in 2011.

“There’s still some way to go to meet our profitability targets,” said chief executive Tom Enders.

Revenues rose 17 percent during the fourth quarter to €19.22 billion, with the core Airbus division posting a 36 percent increase.

But EADS took a €198 million hit during the quarter at its defense electronics contractor Cassidian, in part reflecting restructuring costs.

Renegotiating contracts with government customers resulted in a €100 million charge at helicopter maker Eurocopter.

The company’s core business, aircraft maker Airbus, posted a 36 percent increase in revenue during the final three months, rising to €393 million from €289 million in 2011. Of that, orders for civilian aircraft brought in €309 million while military planes garnered €85 million during the quarter.

Spaceflight division Astrium reported revenues of €121 million, an increase of 19 percent from €102 million in the same period the previous year.

EADS said it expects to sell more commercial aircraft — about 700 — in 2013. Revenues will grow modestly, it said, but results will be affected by problems with its A350 XWB model.

The A350, intended to challenge Boeing’s 787 “Dreamliner,” was delayed because of a problem with the plane’s wings.

“The A350 XWB program remains challenging,” EADS said in a statement. “Any schedule change could lead to increasingly higher impact on provisions.”

The company said it is inviting shareholders to an extraordinary meeting March 27 to approve its new governance structure. EADS last year announced sweeping governance changes that will see influence by state shareholders France and Germany shrink.

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