Oracle Beats Earnings Estimates, Sales in Line
Oracle (ORCL) reported better-than-expected earnings for its fiscal first quarter, but its sales were in line with expectations. As a result, Oracle’s stock fell in after-hours trading.
Key Points:
- Adjusted earnings rose 16% YoY to $1.19 per share.
- Revenue increased 9% to $12.45 billion.
- Analysts had predicted earnings of $1.15 per share on revenue of $12.45 billion.
- Oracle’s cloud services revenue grew 30% to $4.6 billion.
- Cloud infrastructure business revenue rose 66% YoY to $1.5 billion.
- Cloud license and on-premise license revenues declined 10% to $800 million.
Oracle Stock Rises Ahead of Earnings
Prior to the earnings report, Oracle’s stock had been climbing due to upgrades from UBS and Barclays. Both reports highlighted the potential for artificial intelligence applications to drive demand for Oracle’s cloud businesses.
Oracle Chairman and CTO Larry Ellison revealed that AI development companies had signed contracts worth over $4 billion to purchase capacity in Oracle’s cloud platform, double the amount booked in the previous quarter.
Despite the positive results, Barclays analyst Raimo Lenschow expects a muted share price reaction due to the recent momentum in Oracle’s stock.
Technical Ratings for Oracle Stock
Oracle’s stock is currently in a cup base with a buy point of 127.54, according to MarketSmith pattern recognition.
The IBD Stock Checkup tool rates Oracle with a Composite Rating of 95 out of 99, indicating that it outperforms 95% of all stocks based on fundamental and technical criteria. Additionally, it has a Relative Strength Rating of 96, indicating strong price performance compared to other stocks in IBD’s database.
Conclusion
Oracle exceeded earnings expectations but met sales projections for its fiscal first quarter. The company’s cloud services and infrastructure businesses showed significant growth, while its older business lines struggled. Despite the positive results, Oracle’s stock experienced a decline in after-hours trading.
