Oracle sales exceed analysts’ estimates

Business Friday 17/June/2016 13:34 PM
By: Times News Service
Oracle sales exceed analysts’ estimates

San Francisco: Oracle, the maker of database and business software, reported sales that topped analysts’ estimates after cloud-based products picked up momentum with corporate customers.
Fiscal fourth-quarter revenue including some adjustments was $10.6 billion, exceeding estimates of $10.47 billion. Sales declined about one per cent from a year ago. Cloud revenue increased 49 per cent in the quarter ended May 31. Profit excluding certain items was 81 cents a share in the period. Analysts on average had forecast profit of 82 cents. Shares gained as much as 3.8 per cent in extended trading after closing at $38.64 in New York.
Oracle has been trying to shift more sales to cloud-based products increasingly demanded by corporate customers. The new cloud services made up about 8 percent of the company’s total sales during the quarter.
Core cloud revenue is projected to increase 75 per cent to 80 per cent in the current quarter, Oracle Co-Chief Executive Officer Safra Catz said in a statement. Oracle has a "fighting chance” to be first cloud company to reach $10 billion in core cloud revenue, Chairman Larry Ellison said.
Adjusted earnings in the current quarter are forecast at 56 cents to 60 cents a share. Revenue projected to increase 2 per cent to 5 per cent. All company forecasts are in constant currency. Currency headwinds weighed on results; revenue would have been unchanged with constant currency in fiscal fourth quarter. Net income rose 2 per cent to $2.8 billion in the quarter from the year-ago period. New software license revenue in the quarter was $2.8 billion, down 12 per cent.
"The company’s made a lot of progress in the last two years, and it’s starting to bear fruit. But the cloud still represents less than 10 per cent of this company. So, there’s a lot of heavy lifting to go,” said Bill Kreher, an analyst at Edward Jones. "All the metrics seem fairly better than we had expected across the board. I think this is one of the cleanest quarters they’ve put up in a long time,” said Joel Fishbein, an analyst at BTIG.