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Oracle Stock loses after failing to meet Wall Street expectations

Oracle stock (ORCL) fell after the corporate information technology giant disclosed a first-quarter sales shortfall as it tries to catch up in delivering more cloud services and systems.

Image- Bloomberg

With sales decreasing 8% to $813 million, the company’s cloud licensing and on-premise license division was the largest disappointment in the quarter.

Overall, quarterly sales increased 4% to $9.73 billion, falling short of analyst estimates of $9.76 billion.

Oracle Chief Executive Safra Catz noted in a statement that “IaaS and SaaS combined are Oracle’s fastest-growing and highest profit new businesses.”

“As these two cloud companies grow, they will contribute to expanding our total profit margins and driving up earnings per share.”

Oracle’s stock was down 3% premarket to $86.19 at the time of writing.

Catz also mentioned that the company’s two new cloud businesses, IaaS and SaaS, now contribute for more than 25% of overall revenue, with a $10 billion annual run rate.

Meanwhile, Larry Ellison, Oracle’s chairman and chief technology officer, stated that the Austin-based firm is on track to become a leader in cloud infrastructure.

“We launched the next version of the world’s most popular open-source database last quarter,” stated Ellison.

Quarterly earnings report

Oracle Corp. missed analyst sales forecasts for the first quarter of the fiscal year 2022 but above profit estimates for the period thanks to strong growth in its cloud operations.

On revenue of $9.7 billion, the database behemoth posted non-GAAP earnings of $1.03 per share.

According to a FactSet poll of analysts, the firm was anticipated to report earnings of 97 cents per share on revenue of $9.76 billion.

“Oracle’s two new cloud businesses, IaaS and SaaS, now account for more than a quarter of the company’s overall income, with an annual run rate of $10 billion, according to Oracle CEO Safra Catz. “IaaS and SaaS are Oracle’s fastest-growing and highest-margin new businesses when combined. These two cloud companies will help improve our total profit margins and drive earnings per share higher as they continue to develop.”

In after-hours trade, Oracle shares slid $1.24, or 1.4 percent, to $87.65. The stock dropped 0.9 percent during the regular session. The stock is risen 37 percent this year, over double the S&P 500’s 19 percent gain.

Oracle is catching up to internet titans Amazon.com, Microsoft, and Google in the battle to deliver more and more cloud services and systems as the COVID-19 epidemic accelerates enterprises’ migration online. Oracle Chairman Larry Ellison used the results call to highlight a recent piece that praised the company’s services.

In a statement, Ellison stated, “Last week, Cloud Wars released an article headlined ‘Oracle Leapfrogs Google in Major Cloud Ranking,’ describing an upcoming Gartner Report that evaluates the major cloud infrastructure firms.” “Oracle is providing some genuinely cutting-edge infrastructure services.”



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