Oracle Stock Surges 13% Following Strong Quarterly Earnings Beat

Oracle announced its quarterly earnings on Monday, outperforming Wall Street’s expectations and prompting a 13% surge in shares during extended trading.

Here’s a breakdown of their performance in the fiscal third quarter ending Feb. 29, compared to estimates by LSEG, previously known as Refinitiv:

– Earnings per share: Adjusted at $1.41, surpassing the expected $1.38.
– Revenue: Totaled $13.28 billion, slightly lower than the anticipated $13.3 billion.

Looking ahead to the fiscal fourth quarter, Oracle forecasts earnings of $1.62 to $1.66 per share. Analysts, however, had expected slightly higher adjusted earnings per share at $1.64, according to LSEG.

Oracle Stock Surges 13% Following Strong Quarterly Earnings Beat
Oracle surpasses earnings estimates, shares soar 13%. (Credits: Google Finance)

Revenue is expected to grow between 4% and 6% over sales of $13.8 billion a year ago, potentially reaching around $14.5 billion, slightly lower than analysts’ expectations of over $14.7 billion.

Oracle’s CEO, Safra Catz, reaffirmed the company’s commitment to achieving its previously stated goal of $65 billion in sales by fiscal 2026. “Some of these goals might prove to be too conservative given our momentum,” Catz expressed.

Quarterly revenue saw a 7% increase from $12.4 billion a year earlier, while net income rose by 27% to $2.4 billion, or 85 cents per share, from $1.9 billion, or 68 cents per share, a year ago.

The company’s cloud services and license support segment, its largest business, experienced a 12% sales increase to $9.96 billion, slightly surpassing StreetAccount consensus expectations.

Oracle attributed this rise to strong demand for its artificial intelligence servers. Cloud revenue, reported as part of the cloud services unit, climbed 25% year over year to $5.1 billion.

“We signed several large deals this quarter and we have many more in the pipeline,” Catz stated during the earnings call.

Oracle Stock Surges 13% Following Strong Quarterly Earnings Beat
Cloud revenue is up 25% year-over-year, signaling robust growth.

Oracle Chairman Larry Ellison highlighted increased business from Microsoft during the call, mentioning, “We’re building 20 data centers from Microsoft and Azure. They just ordered three more data centers this week.”

However, the company’s other units didn’t perform as well. Cloud license and on-premise sales declined by 3% to $1.26 billion, slightly surpassing StreetAccount’s forecast.

Hardware revenue dropped by 7% to $754 million, while sales in the services division slid by 5% to $1.31 billion, both falling short of StreetAccount expectations.

Before Monday’s report, Oracle shares had risen by 8.7% for the year, slightly outperforming the S&P 500.

Sajda Parveen
Sajda Parveen
Sajda Praveen is a market expert. She has over 6 years of experience in the field and she shares her expertise with readers. You can reach out to her at [email protected]
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