Oracle report shows weaker sales than Wall Street expected

Oracle (ORCL) shares fell 1.9% after the report as the company posted quarterly earnings below analyst average expectations. Oracle continues to grow its cloud business by increasing investments in its own data centers.

Oracle (ORCL), a 44-year-old database software company actively developing in the cloud computing industry, reported its financial results for the first quarter of the fiscal year 2022, which ended August 31, after the close of trading on Monday.

Oracle shares fell 1.9% postmarket on Monday after losing 1.23% in a week of trading.

However, the overall trend for Oracle shares is positive, with growth over the past 13 months at 56%. In addition, the stock has gained 37.4% since early 2021, as investors welcome the company’s desire to increase its cloud computing market share.

Oracle Q1 Financial Report

The company reported an 11% rise in earnings per share (YoY) to $ 1.03, above the analyst average of $0.97.

Revenue rose 4% to $9.73 billion, but that was below Wall Street’s forecasts of $ 9.77 billion. Oracle’s quarterly revenue and earnings statistics since 2017.

After two successive fiscal years of declining sales, the results marked the fifth consecutive quarter of revenue growth (YoY).

As Oracle aims to strengthen its competitive position in the global cloud computing market and gain more customers, such as Zoom Video Communications (ZM), it invests heavily in this segment. As a result, Oracle increased its capital expenditures to more than $ 1 billion from $ 436 million in the same quarter last year for the reporting quarter.

The company is building more data centers as Microsoft’s Azure (MSFT), Amazon’s Amazon Web Services (AMZN), Salesforce (CRM), and IBM (IBM) are robust competitors.

In its press release, Oracle referred to an article on Cloud Wars, citing research from Gartner’s reputable company that “Oracle has surpassed Google in the ranking of major cloud environments.”

Oracle’s two new cloud enterprises, IaaS and SaaS, currently account for more than 25% of our total revenues, with $ 10 billion in annual sales. Taken together, IaaS and SaaS are Oracle’s fastest-growing and most profitable new enterprises. As these two cloud businesses continue to grow, they will drive our entire bottom line and earnings per share.” said Safra Katz, CEO of Oracle.

Oracle Predictions

Oracle’s second-quarter forecast is in the $ 1.09– $ 1.13 range of EPS, with earnings growth expected to be 3-5%. Market analysts expect a profit of $ 1.08 and revenues of $ 10.25 billion, corresponding to an increase of almost 5%.

Oracle dividend

These dividends will be paid to registered shareholders at the close of business on October 12, 2021, with a payment date on October 26, 2021.