Oracle Corporation (NYSE:ORCL) has announced that CEO Mark Hurd will take leave for health reasons, causing ORCL stock to drop 4%.
ORCL Stock Hit By Hurd’s Absence
Oracle, a California-based computer technology firm, confirmed the news in a press release today and did not state how long Hurd’s leave of absence would last. The company’s founder and CTO, Larry Ellison, will assume CEO duties alongside Safra Catz. Investors in ORCL stock clearly feel Hurd’s absence is a hit to the company, particularly given that he has served in the role for five years and oversaw Oracle’s sales organization, advertising, and software groups. Before joining Oracle in 2010, he had served as CEO of Hewlett Packard (NYSE:HPQ).
“At my request, the Board of Directors has granted me a medical leave of absence. As you all know, Larry, Safra and I have worked together as a strong team, and I have great confidence that they and the entire executive management team will do a terrific job executing the exciting plans we will showcase at the upcoming OpenWorld,” said Hurd in today’s press release.
Q1 Report and Pivot to Cloud Technology
The announcement comes at a bad time for ORCL stock, with the company having just posted its earnings for the first quarter of fiscal 2020. While earnings were mostly in line with analysts’ expectations, revenue of $9.22 billion USD lagged the estimate of $9.29 billion USD due to higher operating costs and a program of share buyback. While revenue missed the mark, it was still up slightly year-on-year from $9.19 billion USD.
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Oracle is currently engaging in a pivot towards cloud computing, a highly lucrative sector where it will face tough competition from some of the biggest companies in the world such as Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN). Hurd had led this transition and set a goal of a 50% share of the cloud applications market. Yesterday’s earnings report revealed a slowdown in sales as the company moves away from its legacy products. ORCL stock is currently trading at $53.89.
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