Oracle (ORCL) Q2 Earnings & Revenues Top, Tepid Cloud View
Zacks Investment Research | Dec 14, 2017 09:45PM ET
Oracle Corporation (NYSE:ORCL) delivered stellar second-quarter fiscal 2018 results. Non-GAAP earnings of 70 cents per share and revenues of $9.63 billion comfortably beat the Zacks Consensus Estimate of 68 cents and $9.555 billion, respectively.
Earnings increased 14.8% from the year-ago quarter. This was primarily driven by 6% (4% in constant currency) growth in revenues that was in line with the high end of management’s guidance of 4-6%.
Oracle’s top-line growth benefited from the ongoing cloud-based momentum. Total cloud revenues (15.9% of total revenue compared with 11.9% in the year-ago quarter) advanced 44% (43% in constant currency) to $1.52 billion.
Moreover, total cloud and on-premise software revenues increased 9% (7% in constant currency) to $7.83 billion.
We believe that the company’s growing cloud market share will continue to drive top-line growth in the foreseeable future.
Shares Decline on Soft Outlook
Shares were down 6.6% in after-hour trading following the results. The decline can be attributed to soft cloud outlook. Cloud revenues including Software as a service (SaaS), Platform as a Service (PaaS) and Infrastructure as a Service (IaaS) are expected to grow between 21% and 25%, much lower than 44% reported by Oracle in the last quarter.
Notably, Oracle’s stock has gained 26.8% year to date, underperforming the rally of 39% of the Zacks Investment Research
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