Oracle's share price plunged eight per cent last night as the vendor missed quarterly sales expectations by a country mile.
The vendor blamed the shortfall on poor sales execution by new sales staff as hardware sales crashed by 23 per cent and sales of new software licences and cloud subscriptions unexpectedly fell two per cent.
Investors were also spooked by a Fortune report that private equity house Blackstone is looking to poach Oracle president Mark Hurd as part of a potential counterbid against Michael Dell's planned MBO of his eponymous firm.
Overall revenues for Oracle's fiscal third quarter fell one per cent year-on-year to $8.96bn (£5.9bn), well short of the $9.38bn Wall Street had anticipated, while net profit was flat at $2.5bn.
"We're not pleased at all with our revenue growth this quarter," chief financial officer Safra Catz said on a Q3 conference call, a transcript of which can be found here.
Oracle has taken on 4,000 sales staff over the last 18 months and Catz admitted the newest recruits hadn't shown enough "urgency" in Q3 because they were too focused on their annual targets.
This, rather than any change in the economic backdrop or chinks in its portfolio, was to blame for the sales slide, Catz said, citing the fact that many deals had "flopped over" into Q4 as evidence.
"Looking forward, we're encouraged by the tremendous pipeline growth, but clearly we have work to do in training new reps on managing the sales process and the importance of establishing a quarter rhythm with their deals," she said.
Hardware revenues nose-dived 23 per cent to $671m, which Oracle blamed on the fact customers were aware that new products, including the M5 and T5, are coming out next quarter.
However, this was far worse than the flat to 10 per cent drop Oracle had predicted and chief executive Larry Ellison admitted that the turnaround in hardware sales would not come until Q1.
"I think Q1 you're going to see a big turnaround, and next year will be a big growth year for our entire hardware business," Ellison predicted.
Oracle also issued an unexpectedly muted guidance for its normally frenzied Q4, predicting that revenue would range from one per cent down to four per cent up on last year. Hardware sales are expected to fall between 13 and 23 per cent, with new software licence and cloud subscription revenue set to expand from one to 11 per cent, it said.
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