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Oracle shares fall on weak 4Q revenue

The Associated Press

Oracle Corp.'s shares tumbled 9 percent Friday after the software maker reported another quarter of disappointing revenue.

THE SPARK: The Redwood Shores, Calif., company reported after the market closed Thursday that it earned $3.8 billion, a 10 percent increase from the same time last year, but revenue was flat at $10.9 billion — about $170 million below analyst forecasts.

THE BIG PICTURE: The quarter underscored the concerns that Oracle is not adapting to today's technological software shift.

Customers are increasingly shifting to cloud computing, which differs from Oracle's traditional approach of licensing software that is installed on individual computers kept on the premises of its customers.

The company doubled its stock dividend, but investors were not won over.

THE ANALYSIS: Pacific Crest Securities analyst Brendan Barnicle said that the company has been executing poorly for several quarters and he lowered his price target on the stock to $35 from $44.

However, he said that the company has a good acquisition strategy that could help it grow to meet market demand and is modernizing some of its approaches. Barnicle believes the company's stock will bottom out this summer and that may prove to be a time to buy.

SHARE ACTION: Oracle Corp. closed at $30.14, down $3.07.