Oracle (ORCL, $64.05) surprised investors after reporting better than expected earnings, exceeding estimates on both top and bottom lines for its fiscal fourth quarter. The company shares soared more than 12%, closing at $64.07 on Monday in after-hours trading, after announcing foreseeable growth in its sales and earnings due to its cloud-based offerings.
Oracle's revenue increased 5% to $11.8 billion, topping the average analyst estimate of $11.7 billion, marking its eighth consecutive quarter of year-over-year revenue increases. Adjusted earnings per share were $1.54 a share, beating the consensus estimate of $1.37, excluding stock-based compensation expenditures and other things. The company's cloud services and license support sales increased 3% to $7.61 billion from the previous year, while its cloud and on-premise license revenues rose 18% to $2.54B, and hardware sales declined 3% to $856M.
Despite its current strength, Oracle's stock has dropped 27% YTD, slightly better than the Nasdaq, which has tumbled 31%.
Why it matters
Oracle's earnings beat comes as a welcome relief for investors— as they focus on companies generating profitability during this downturn, particularly given a recent spate of disappointing forecasts from cloud software companies such as DocuSign (DOCU) and growing speculation that the economy is close to a recession, causing a widespread sell-off of software stocks on Wall Street.
