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(Bloomberg) — Oracle Corp. reported sales that fell short of analysts’ estimates, signaling that the coronavirus pandemic and recession have spurred a pullback in corporate spending on information technology.Revenue declined about 6.3% to $10.4 billion in the period ended May 31, the Redwood City, California-based company said Tuesday in a statement. Analysts, on average, projected $10.7 billion, according to data compiled by Bloomberg. Shares declined about 4% in extended trading after the results.Chief Executive Officer Safra Catz and Executive Chairman Larry Ellison have sought to renew growth at Oracle, the world’s second-largest software maker. The shift to cloud computing caught the 43-year-old tech giant off guard and it’s still struggling to switch existing database customers to cloud-based offerings and better compete against Amazon.com Inc. and Microsoft Corp. The company notched a key win when Zoom Video Communications Inc. began using cloud services from Oracle along with Amazon to cope with a strain on its network capacity amid blockbuster demand for its videoconferencing tool.In the fiscal fourth quarter, cloud license and on-premise license sales declined 22% to $1.96 billion, suggesting the company is signing fewer new software deals. Revenue from cloud services and license support increased 1% to $6.85 billion. That metric includes sales from hosting customers’ data on the cloud, but a large portion is generated by maintenance fees for traditional software housed on clients’ corporate servers.“Our overall business did remarkably well considering the pandemic, but our results would have been even better except for customers in the hardest-hit industries that we serve such as hospitality, retail, and transportation postponing some of their purchases,” Catz said in the statement.Profit, excluding some items, was $1.20 a share, compared with analysts’ average estimate of $1.15.“It was a disappointing quarter,” said Hari Srinivasan, an analyst at Neuberger Berman, which has been a long-term Oracle investor. “We were expecting a decline because although Oracle’s products are important for enterprises, that’s not where the spending is. Most companies are spending on getting employees working from home and the cloud.”The company’s revenue performance may be weak for the next two or three quarters until spending recovers, he added.Oracle said that revenue from cloud-based accounting and financial planning software climbed 32% in the quarter from a year earlier. The company’s software for managing employees increased 27%. Oracle didn’t disclose total sales of the products, which compete against those from Workday Inc.Shares declined to a low of $51.70 in extended trading after closing at $54.59. The stock has climbed 3% since the start of the year.(Updates with comments from analyst in the seventh paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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