Oracle CEO Safra Catz delivers a keynote address at Oracle OpenWorld 2019 on September 17, 2019 in San Francisco, California. Oracle CEO Safra Catz kicked off day two of the 2019 Oracle OpenWorld with a keynote address. The annual conference runs until September 19.
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Oracle shares were up 3% lower in expanded trading Wednesday after the enterprise software maker reported a third-quarter fiscal profit that exceeded analyst estimates and increased its quarterly dividend from 24 cents a share to 32 cents a share.
This is how the company did it:
- Merits: $ 1.16 per share, adjusted, versus $ 1.11 per share, as expected by analysts, according to Refinitiv.
- Revenue: $ 10.09 billion, versus $ 10.07 billion as expected by analysts, according to Refinitiv.
Oracle sales increased 3% year-on-year in the quarter, which ended Feb. 28, according to a statement. Sales grew by almost 2% in the previous quarter.
Oracle’s top business segment, cloud services and licensing support, delivered $ 7.25 billion in revenue, up 5% year-over-year in the quarter and slightly below the FactSet consensus estimate of $ 7.28 billion.
Oracle’s cloud and on-premises cloud and licensing revenues totaled $ 1.28 billion, up 4% and above the FactSet consensus of $ 1.21 billion. The company reported $ 820 million in hardware revenue, down 4% and just below the $ 843 million FactSet consensus.
In the quarter, Oracle introduced a portable robust server for running cloud workloads and announced the availability of version 21c of its database software as a cloud service.
Last week, Barclays analysts led by Raimo Lenschow increased their rating on Oracle stock to the equivalent of buying from the equivalent of hold, citing their belief that revenue growth from the cloud would accelerate. “We expect the stock to reappraise, especially as investor interest in valuations and cash-flow growth stories continues to improve in a higher-yielding environment emerging from the pandemic,” they wrote.
As for guidelines, analysts polled by Refinitiv expected $ 1.28 in adjusted earnings per share for the fiscal fourth quarter and $ 10.84 billion in revenue, implying growth of about 4%.
Excluding the out-of-hours move, Oracle stock is up about 12% since early 2021, while the S&P 500 index is up 4% over the same period. The stock was up in February as some investors considered the growth potential of cloud services. In the fiscal third quarter, Oracle’s capital expenditures were $ 1.42 billion, up 25%, while one of Oracle’s cloud competitors, Microsoft, had $ 5.4 billion in capital expenditures in the fourth quarter, up 20%.
Oracle last increased its dividend in 2019, when it was up 26%, compared to the 33% increase announced Wednesday.
Executives discuss the results with analysts and advise on a conference call starting at 5:00 p.m. Eastern Time.
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