Oracle Corp. topped Wall Street’s expectations for profit and revenue in its most recent quarter, though the software company is still expected to issue a forecast that could be more fraught.
Oracle
ORCL,
on Monday reported fiscal second-quarter net income of $1.74 billion, or 63 cents a share, on revenue of $12.28 billion, up from $10.36 billion a year ago. After adjusting for stock-based compensation and other costs, Oracle reported earnings of $1.21 a share, even with the same quarter a year ago.
Analysts on average expected adjusted earnings of $1.17 a share on sales of $11.96 billion, according to FactSet. Oracle shares gained nearly 3% in after-hours trading immediately after the results were announced, following a 1.8% increase to $81.29 in regular trading.
Oracle executives did not provide guidance for the fiscal third quarter in Monday’s announcement, but Chief Executive Safra Catz does typically provide a forecast in their conference call, which is scheduled for 5 p.m. Eastern time. Those numbers are likely to affect earnings more than the results, as concerns about an increasing slowdown in business spending have rocked a swath of software companies in recent weeks.
“We believe the darkest days of this downturn are ahead of us,” Monness Crespi Hardt analyst Brian J. White wrote in a preview of Oracle results, later adding that “results across Big Tech, the leading public clouds, and the enterprise software complex paint an increasingly concerning picture for the software world heading into 2023.”
Oracle stock has outperformed the S&P 500 index
SPX,
since executives hosted an event for financial analysts and investors in October, with shares gaining 4.8% in the past three months while the larger index fell 3.9%. Oracle executives promised to grow adjusted earnings by more than 10% every year as revenue growth accelerates, after years of stagnant sales growth led to large share repurchases and constant cuts to improve the software company’s bottom line.
Oracle is experiencing strong revenue growth thanks to the acquisition of healthcare-focused company Cerner, a $28 billion deal that closed in June. There are hopes for organic growth as well, though, as Oracle’s cloud-computing effort starts to show fruit, including winning part of a recent Defense Department contract after suing to halt an earlier version of that award.
