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Wall Street Beat: Despite Oracle earnings miss, software appears healthy

Marc Ferranti | June 23, 2014
Despite the enterprise software giant's weaker-than-expected financials, there was enough good news on the tech sales front this week to keep expectations for IT on the optimistic side.

Here again, cloud was the key. For example, Adobe Marketing Cloud quarterly revenue was $283 million, up 23 percent year over year, the company said.

"Our earnings performance in Q2 reflects the financial leverage we have in our model," said CFO Mark Garrett in a statement. "With Adobe's Creative Cloud transformation behind us, our focus moving forward is to drive strong revenue and earnings growth with our market-leading cloud offerings."

There was also good news from IDC on the smartphone front this week -- a good thing, since overall IT sales growth is expected to be fueled by smartphones as tablet sales flatten out and the PC market sinks.

IDC said its recent surveys show that smartphones will drive double-digit growth of what it calls "smart connected devices" this year and for the next few years. The smart connected devices category includes mobile phones, tablets and PCs connected to the Internet.

IDC is forecasting the number of worldwide smart connected devices to grow 15.6 percent year over year in 2014, reaching close to 1.8 billion devices.

Even BlackBerry had some good news this week. Quarterly revenue for the financially ailing company plunged 69 percent year over year to $966 million, but it managed to eke out a profit of $23 million compared to a loss of $84 million a year earlier.

Without certain accounting changes that affected the tax hit on earnings, the company would have reported a loss. But BlackBerry CEO John Chen in a conference call stressed the positive, noting that the company's EZ Pass Program in just a few months fueled the issuance of 1.2 million licenses for BlackBerry Enterprise Server 10. The company may yet have a life as a smaller version of its old self, as Chen insisted that it will return to annual profitability in its 2016 fiscal year.

Despite mixed earnings results so far this year, there has been enough good news on the enterprise software and mobile front for market watchers to maintain guarded optimism, as tech company shares to date are up about 8 percent on the Nasdaq Computer Index.


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