Larry Ellison, co-founder and executive chairman of Oracle Corporation, speaks at the Oracle OpenWorld conference in San Francisco on October 22, 2018.
David Paul Morris | Bloomberg | Getty Images
oracle reported quarterly profits on Monday that beat Wall Street expectations. Shares rose 13% in extended trading.
The company’s results for the fiscal third quarter ended February 29 compared to LSEG (formerly Refinitiv) estimates:
- Earnings per share: adjusted $1.41, forecast $1.38
- revenue: $13.28 billion vs. expected $13.3 billion
Oracle said it expects earnings per share to be between $1.62 and $1.66 for the fourth quarter of its fiscal year. Analysts had expected adjusted earnings per share to be $1.64, according to LSEG. Sales growth is expected to be 4% to 6% compared to the same period last year, which had sales of $13.8 billion. The midpoint of this range would represent sales of about $14.5 billion, while analysts had expected sales of just over $14.7 billion.
Oracle CEO Safra Catz said the company is committed to achieving its previously stated goal of $65 billion in revenue by fiscal year 2026. “Given our momentum, some of these targets may be too conservative,” Katz said.
Revenue for the quarter increased 7% from $12.4 billion in the year-ago period. Net income was $2.4 billion, or 85 cents per share, an increase of 27% from $1.9 billion, or 68 cents per share, in the year-ago period.
Revenue from Oracle’s largest business, Cloud Services and License Support, rose 12% to $9.96 billion, slightly beating the Street consensus estimate of $9.94 billion. The company attributed this increase to strong demand for artificial intelligence servers.
Catz said the company added several “large new cloud infrastructure” deals during the quarter. Oracle said its cloud revenue, reported as part of its Cloud Services segment, increased 25% year over year to $5.1 billion.
“We closed some large deals this quarter and have more in the pipeline,” Katz told investors on an earnings call.
Oracle Chairman Larry Ellison mentioned the increase in business from Microsoft during the company’s earnings call.
“We’re building 20 data centers in Azure with Microsoft. They just ordered three more data centers this week,” Ellison said.
Other divisions of the company did not fare as well.
Cloud license and on-premises revenue fell 3% to $1.26 billion, slightly above Street estimates. Hardware sales fell 7% to $754 million, and the company’s services division sales fell 5% to $1.31 billion, both of which were below StreetAccount’s expectations.
Before Monday’s report, Oracle stock had risen 8.7% since the beginning of the year, slightly outperforming the S&P 500.