Oracle stock surges 15% on strong cloud earnings

Oracle Corp.’s push to move more of its business to the cloud paid off in the fiscal fourth quarter, and the stock gained late Monday.

The Silicon Valley behemoth topped top-line and bottom line earnings with strong growth in cloud and on-premises license revenue (up 18% year over year to $2.5 billion) and modest gains in revenue from Cloud Services and License Support (up 3% to $7.6 billion).

Oracle ORCL,
-4.60%
Shares were up 15% after the close after falling 4.5% in the regular session to close at $64.07.

For the fourth fiscal quarter, Oracle reported Net income of $3.2 billion, or $1.16 per share, compared to $4 billion, or $1.37 per share, in the prior-year period.

Adjusted earnings, which exclude stock-based compensation expense and other items, were $1.54 per share.

Revenue increased 5% to $11.8 billion from $11.2 billion in the year-ago quarter.

Analysts polled by FactSet estimated earnings per share at $1.37 on sales of $11.6 billion.

“We saw a strong increase in demand in our infrastructure cloud business – which grew 39% in constant currency. We believe this increase in revenue growth indicates that our infrastructure business has now entered a hyper-growth phase,” said Chief Executive Safra Catz in a expression.

Oracle didn’t provide guidance for the first quarter in its earnings release. in one Conference call with analysts Late Monday, Catz offered earnings guidance of $1.09 to $1.13 per share. Wall Street analysts are expecting earnings of $1.13 per share on sales of $10.2 billion for the current August quarter.

“The real story here is the impressive growth of 39% [Oracle’s] cloud infrastructure business and is thus growing more closely with the market leaders [Amazon.com Inc.’s
AMZN,
-5.45%
] AWS and [Microsoft Corp.’s
MSFT,
-4.24%
] Azure and Google GOOGL,
-4.29%

WELL,
-4.08%,
‘ Daniel Newman, principal analyst at Futurum Research, told MarketWatch.

“Oracle’s outlook continues to look brighter — even in this tough technology market, one could argue that Oracle is one of the better bets,” Newman said.

Oracle shares are down 26% so far this year, while the S&P 500 index SPX,
-3.88%
Down 20% in 2022.

https://www.marketwatch.com/story/oracle-stock-jumps-9-on-strong-cloud-revenue-11655151953?rss=1&siteid=rss Oracle stock surges 15% on strong cloud earnings

Brian Lowry

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