Oracle Quarterly Earnings, Revenue Beat Views, Misses Cloud Estimates

Oracle Quarterly Earnings, Revenue Beat Views, Misses Cloud Estimates

Oracle ( ORCL ) reported quarterly earnings after the market close Thursday that beat on the top and bottom line but turned in a cloud computing report that fell short, as did its revenue outlook.

[ibd-display-video id=3023686 width=50 float=left autostart=true]The company said total cloud revenue during the quarter rose 44% to $1.52 billion, below the consensus estimate of $1.56 billion.

The software-as-a-service portion of its cloud platform rose 55% to $1.12 billion but that was short of the $1.14 billion consensus. Oracle said cloud revenue plus on-premise software revenue in the quarter rose 9% to $7.8 billion from the year ago period.

Oracle is undergoing a multiyear transition from traditional on-premise software licensing and maintenance support to a model driven by cloud subscriptions. Oracle began pushing aggressively into cloud computing about three years ago, negatively impacting sales and earnings.

“Overall cloud revenue growth of 44% drove our quarterly revenue and earnings higher,” Oracle’s Chief Executive Safra Catz said in prepared remarks. “I expect the business to continue to grow and strengthen over the coming quarters.”

But Catz, in the earnings conference call, said cloud revenue in the current quarter should rise 21% to 25% from the year-ago period. Analysts were forecasting a 42% increase to $1.69 billion.

IBD’S TAKE: During after-hours trading Oracle fell to a level close to its 50-day moving average . Read IBD’s The Big Picture column each day to stay on top of the market direction, a key indicator that lets you know when you can be aggressive and when you should move to the sidelines.

The database software company reported revenue of $9.6 billion , up 6% from the year-ago period and beating the consensus estimate of $9.57 billion. It reported adjusted earnings of 70 cents, up 14% and beating the consensus estimate of 68 cents, for its fiscal second quarter ended Nov. 30.

For the current quarter Oracle said it expects revenue growth of 2% to 4% from the year-ago period, which is below the consensus for 4.3% growth.

Oracle shares were down 6.5%, near 47 during after-hours trading on the stock market today .

The Oracle board of directors increased the authorization for share repurchases by $12 billion . It also declared a quarterly dividend of 19 cents per share, payable to stockholders of record as of Jan. 10.

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