New software licenses and cloud software subscriptions revenues slipped 2 percent to $2.3 billion, well below analysts' estimates and falling short of its own projection for growth of 3 to 13 percent.
RICHARD WILLIAMS, ANALYST, CROSS RESEARCH
"Licenses and hardware were short of expectations... That took the total revenue well below our expectations.
"We had heard from channel checks that this was a weak quarter. These results validate that research. Overall demand is weak.
"One of the things that drives software demand is the headline retail news. CEO and CFO sentiment is a big factor. Business sentiment and confidence is way down. People are more cautious right now in business, than they are in the stock market. That's how we get very high valuation multiples on stocks, but businesses pulling back.
"Government, with the exception of some state and local government, was weak, especially the federal government."
MATTHEW HEDBERG, ANALYST, RBC CAPITAL MARKETS
"Kind of a miss across the board. They didn't give any commentary in the press release about what might have caused that. The spending environment is still uneasy.
"Hardware has been weak so that's not as a big of a surprise, but the new software license was weak, a bit more of a surprise.
"They entered the quarter and management said that December was off to an excellent start. So they caught some people a bit off-guard here."
BRENDAN BARNICLE, ANALYST, PACIFIC CREST
"Pretty disappointing. Trying to find the silver lining here, looks like the software update and support business was better. But pretty disappointing on the hardware side of the business in particular. Came in at $671 million, consensus had been for $796 million. A pretty sizeable miss.
"Generally it's a pretty big miss overall.
"On the hardware side they're facing the same headwinds that everybody in the hardware industry is facing, as you get more consolidation and commoditization of hardware."
(Reporting by Alistair Barr and Alexei Oreskovic)