Oracle Beats Earnings Estimates in Q1, Stock Falls

Oracle (ORCL) reported better-than-expected earnings for its fiscal first quarter, but its sales were in line with expectations, causing the stock to drop in extended trading.

Key Points:

• Adjusted earnings rose 16% YoY to $1.19 per share
• Revenue increased 9% to $12.45 billion
• Analysts had expected earnings of $1.15 per share on revenue of $12.45 billion
• Oracle stock fell 9.2% in after-hours trading
• Cloud services revenue climbed 30% to $4.6 billion
• Cloud infrastructure business revenue rose 66% YoY to $1.5 billion
• Cloud license and on-premise license revenues fell 10% to $800 million

Oracle Stock: Rising Ahead of Earnings

Prior to the earnings report, Oracle stock had been climbing due to positive upgrades from UBS and Barclays. Both reports highlighted the potential for increased demand for Oracle’s cloud businesses driven by artificial intelligence applications.

Oracle Chairman and CTO Larry Ellison stated that AI development companies had signed contracts for more than $4 billion of capacity in Oracle’s cloud platform, doubling the amount booked by the end of the previous quarter.

Oracle Stock: Technical Ratings

ORCL shares are currently in a cup base with a buy point of 127.54. According to MarketSmith pattern recognition, Oracle has a Composite Rating of 95 out of 99, indicating strong performance based on fundamental and technical stock-picking criteria. The stock also has a Relative Strength Rating of 96, showing how its price performance compares to other stocks in IBD’s database.

Conclusion

Oracle’s Q1 results exceeded earnings expectations but fell short in terms of sales. The company experienced growth in its cloud services and infrastructure businesses, while facing challenges in its older business lines. Despite the stock’s recent momentum, analysts predict a muted share price reaction in the short term. However, the positive long-term story remains unchanged with the company’s focus on cloud and AI.