Oracle (NYSE:ORCL) has beaten second quarter earnings estimates by one cent. The tech giant earned 61 cents a share. However, quarterly sales were $9 billion, which is slightly less than $9.11 billion expected by analysts. The immediate reaction by investors sent the company's stock down by 2 percent.
It was the first quarter ever when Oracle's cloud service revenues exceeded $1 billion mark. And this is among the areas where the company expects to grow the most. When it comes to Cloud Software as Service (SaaS) and Platform as Service (PaaS), the revenues exceeded $900 million, up 87% in comparison to a year ago. For Infrastructure as Service (IaaS), the revenues were above $200 million, bringing total cloud service revenues to $1.1 billion.
"For four consecutive quarters our Cloud SaaS & PaaS revenue growth rate has increased. As we get bigger in the cloud, we grow faster in the cloud," stated company's CEO, Safra Catz.
Oracle claims to have passed Salesforce.com (NYSE:CRM) with Saas sales to companies with over 1,000 employees. Salesforce.com is a highly popular Customer Relationship Management (CRM)software.
But, the biggest income comes to software licenses and related revenues. These topped $6 billion in the second quarter. Finally, when it comes to hardware sales and support, Oracle had latest quarter revenues exceeding $1 billion.
When it comes to Operating Margins, these were 34 percent, and Operating Income added to $3 billion. Under non-GAAP accounting, however, the margins were 42 percent, and Operating Income stood at $3.8 billion. Coming to Earnings Per Share (EPS), these were 48 cents, and 61 cents under non-GAAP measures.
In addition to cloud services, Oracle develops and supports database and middleware software applications, including software for mobile applications. Oracle also makes business applications to assist with financial management, risk and compliance, project management, customer relationships and service, supply chain management, human resources, business analytics, and some other areas.
Presently, Oracle trades slightly under $40 per share. The 52-week range is $33-$42, and company's Beta stands at 1.15, making the stock only slightly more volatile than the overall market. Per Yahoo Finance, the average one-year analyst price target is just few cents below $44 a share, about 10% higher than current price.
Oracle's market cap now stands at $160 billion, making it among the largest tech companies in the world. Its P/E ratio stands at 18.50, while the company pays $0.60 in dividends ($0.15 quarterly), bringing the current yield to 1.5%.