Oracle Corp shares dropped 6.3 percent as investors were disappointed that its profit beat estimates by a narrower margin than in recent quarters.
It released the disappointing results as Micron Technology Inc reported lower-than-expected quarterly profit.
The reports from the two companies don’t bode well for other tech companies, which face shaky economies, especially in Europe. Most tech companies don’t report until next month.
“IT [spending] has slowed down. Any company that is in technology is going to get impacted,” Global Equities Research analyst Trip Chowdhry said.
Oracle reported profit, excluding items, of US$0.75 per share for the fiscal fourth quarter that ended on May 31. That beat consensus estimates of US$0.71 per share by 5.6 percent, according to Thomson Reuters I/B/E/S. On average, it has exceeded profit estimates by 10 percent over the past six quarters.
Chowdry added that, on a historical basis, Oracle’s fourth-quarter earnings usually “beat [estimates] by a huge margin,” but this time, it “just managed” to beat those figures.
Quarterly revenue rose 13 percent from a year earlier to US$10.8 billion, in line with the average analyst forecast of US$10.75 billion.
The world’s No. 3 software maker reported that new software sales in the fourth quarter rose 19 percent from a year earlier to US$3.7 billion. That beat its own forecast of 4 percent to 14 percent growth.
However, sales in its hardware division, which it acquired with its purchase of Sun Microsystems, dropped 6 percent to US$1.2 billion.
Micron, the largest US maker of computer-memory chips, also saw shares decline as much as 15 percent in late trading on Thursday after fiscal third-quarter sales and profit fell short of analysts’ estimates.
Profit was US$75 million, or US$0.07 a share, compared with US$939 million, or US$0.92 a year earlier. Revenue in the period that ended on June 2 fell 6.5 percent to US$2.14 billion, Micron said in a statement.
Analysts in a Bloomberg survey estimated profit of US$0.18 and sales of US$2.38 billion.
The price of DRAM chips dropped as supplies increased and demand from makers of consumer laptops and desktop PCs remained sluggish, the Boise, Idaho-based company said.
Orders are also slowing for chips used in inexpensive mobile phones, pushing down prices, Micron CEO Steve Appleton said.
“We’ve had some inventory accumulation in the channel, and desktop and notebooks continue to be weak,” Appleton said on a conference call with analysts. “We can also add wireless to the list of weak markets.”
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