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Oracle Up 10% On Earnings Beat

Published 06/22/2017, 01:14 PM
Updated 03/09/2019, 08:30 AM

Shares of Oracle Corporation (NYSE:ORCL) jumped on Wednesday after it delivered its fiscal fourth-quarter earnings report that beat most analyst estimates and expectations. It has risen by almost 20% this year.

The shares of the American-tech company also traded above the $46.99 level for the first time ever during regular market session sending its shares up by almost 9% during Tuesday’s after-hours trading from closing during the day by around 1%. The company was also the first enterprise group to record $200 billion in market valuation since the 1990s.

Earnings Report

For the fiscal fourth-quarter, the tech company delivered a growth of 58% in their cloud businesses. This covered some of the losses the company incurred from their new software licenses which declined by 5% but significantly lower than the 16% drop during the previous period.

The company also posted an earnings of 89 cents per share versus analysts estimates of 78 cents per share. Oracle’s revenue rose by 3% for the quarter coming in at $10.9 billion beating analyst forecasts of $10.5 billion. Oracle also reported that its revenue from its subscription software has reached $1 billion for the first time. Its net income stood at $3.23 billion or 76 cents per share for the final quarter of its fiscal year 2017.

The company also gave an earnings guidance for the first quarter of its 2018 fiscal year with their non-GAAP earnings expected to come at around 59 to 61 cents and a growth of 4-6% in revenue. Analysts, on the other hand, predicted that the company’s earnings will average at 59 cents per share and a 3.9% growth in Oracle’s revenue.

Rising Cloud Demand

The better-than-expected earnings report was attributed by both the company and analysts to the rising demand for cloud computing services. The company which transitioned into cloud computing long before has sent the company’s revenue rising for the fourth consecutive quarter coming from a decline of almost two fiscal years.

Oracle’s cloud businesses currently allow their clients to access their services without the need to install computer programs has proved to be one effective growth driver and has placed the company at par with cloud computing giants such as Salesforce.com Inc (NYSE:CRM) and Microsoft (NASDAQ:MSFT). The company’s cloud-computing department remains relatively new and small compared to that of Amazon (NASDAQ:AMZN) and Microsoft but has delivered exceptional cloud services giving them strong customer base.

Oracle has been consistently expanding its cloud-based services in the past quarter. Last month, it reached an agreement with AT&T (NYSE:T) to move a number of its large-scale databases under Oracle’s cloud platform.

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