On Monday, Oracle released revenue that was in line with projections, but its profitability and quarterly guidance fell short of analysts’ expectations.
Due to a contribution from the recently purchased software company Cerner, revenue increased by 18% in the quarter compared to the prior year.
Here is how the business performed:
- Adjusted earnings per share were $1.03 compared to analysts’ expectations of $1.07, according to Refinitiv.
- According to Refinitiv, revenue was $11.45 billion compared to the experts’ prediction of $11.45 billion.
According to a statement, revenue growth in the quarter that concluded on August 31 jumped from the 5% it had reported in the prior quarter.
After the $28 billion acquisition of Cerner was completed during the quarter, Cerner made a $1.4 billion contribution to Oracle.
From $2.46 billion the year before, net income decreased to $1.55 billion in the current quarter. If it weren’t for adverse foreign currency rates, Oracle claimed it would have witnessed an increase of 8 cents in adjusted earnings per share.
Revenue for Oracle’s cloud services and license-support segment came in at $8.42 billion, up 14% and exceeding the $8.27 billion StreetAccount average.
According to a statement from CEO Safra Catz, Oracle’s cloud applications and infrastructure businesses now account for more than 30% of overall revenue. Cloud infrastructure’s quarterly sales increased by 52% to $900 million.
Oracle announced the availability of its database software over Microsoft’s Azure public cloud, which is powered by Oracle’s own cloud infrastructure, in addition to concluding the Cerner transaction.
In terms of forecasts, Oracle stated that it anticipates adjusted earnings per share of $1.16 to $1.20 and sales growth of 15% to 17% in the fiscal second quarter. Refinitiv’s poll of analysts had predicted $1.27 per share and $12.17 billion in revenue, which would have represented an increase of over 18%.
In the current quarter, Catz said she anticipates exchange rates to have a negative impact on revenue of 5% to 6% and on earnings per share of up to 7 cents per share.
The co-founder, chairman, and head of technology of Oracle, Larry Ellison, bragged about more clients coming to the Oracle Cloud Infrastructure, or OCI.
“I personally have been talking to some of Amazon’s most famous brands that are running at AWS,” he said. “And the AWS bill is getting very large. And they can save a huge amount of money by moving to OCI. And I expect next quarter we’ll be announcing some brands, some companies moving off of Amazon to OCI that will shock you. I’ll stop there.”
With the after-hours transaction excluded, Oracle shares have lost over 12% of their value so far this year, compared to a 14% loss for the S&P 500.