Technology

Why Oracle Earnings Are So Great

Chris Lange

Published: December 17, 2018 4:17 pm

Last Updated: January 11, 2020 1:35 pm

Oracle Corp. (NYSE: ORCL) released its fiscal second quarter financial results after the markets closed on Monday. The company said that it had $0.80 in earnings per share (EPS) and $9.56 billion in revenue, which compares with consensus estimates from Thomson Reuters that were calling for $0.78 in EPS and $9.52 billion in revenue. The same period from last year had $0.70 in EPS and $9.63 billion in revenue.

Short-term deferred revenues were up 3% to $8.2 billion compared to a year ago. Operating cash flow was up 5% to $15.2 billion during the trailing 12 months.

In terms of its segments, the company reported:

• Cloud Services and License Support revenues increased 5% year over year to $6.64 billion in constant currency.
• Cloud License and On-Premise License revenues decreased 6% to $1.22 billion.
• Hardware revenues decreased 3% to $891 million.
• Services revenues decreased 2% to $817 million.

Safra Catz, Oracle CEO, commented:

In Q2, non-GAAP earnings per share grew 19% in constant currency. In addition to our strong EPS growth, free cash flow grew 10% to $13.8 billion over the previous twelve months. I am confident that we will continue to record strong EPS and free cash flow growth during the second half of this fiscal year.

Mark Hurd, Oracle CEO, added:

Oracle’s two cloud ERP businesses, Fusion ERP and NetSuite ERP, delivered a combined revenue growth rate of 32% in Q2. With nearly 6,000 Fusion ERP customers and over 16,000 NetSuite ERP customers, Oracle is the clear leader in cloud ERP.  ERP has always been the largest segment of the enterprise applications business, so we have lots of room to grow as customers migrate from their traditional on-premise ERP to the Oracle Fusion ERP Cloud.

Shares of Oracle closed Monday at $45.75, with a 52-week range of $42.57 to $53.48. The stock has a consensus analyst price target of $52.90. Following the announcement, the stock was up 3.6% at $47.40 in the after-hours session.