A 14% decline in hardware sales cost tech giant Oracle dearly during its Q2 FY2012 financial results as total revenue only showed a slight increase.
The Redwood Shores, California-based company moved into the hardware business with its 2010 acquisition of Sun Microsystems for $7.4bn. However, sales of hardware products fell 14% to $953m, well below analyst estimates of around $1.06bn. Total hardware revenue, which includes hardware systems support, dropped 10% to $1.57bn.
The poor performance of the hardware division pulled down Oracle’s overall financial figures. Revenue climbed slightly to $8.79bn, up just 2% from $8.58bn a year previously. The software division, including new licences, license updates and product support rose 7% to $6.03bn.
Net income at the company climbed 17% to $2.19bn from $1.87bn a year ago.
"Hardware systems revenue was $953 million for the quarter, due in part to a product transition to T4 processor-based products, as some customers moved to qualify the new servers and significantly slowed buying the older systems," said CFO Safra Catz in a conference call with analysts.
"We saw early demand for the new SPARC SuperCluster but only released the product for general availability at the end of the quarter, allowing us to ship only a couple," she added.
CEO Larry Ellison preferred to focus on Oracle’s Exa-range of products. "This past Q2, Oracle sold over 200 Exadata and Exalogic engineered systems. In Q3, we plan to sell over 300 Exadata and Exalogic engineered systems. In Q4, we plan to sell over 400 Exadata and Exalogic engineered systems," he said on the same call.
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