Oracle Reports Strong Sales and Earnings
Software and cloud computing giant Oracle Corp. (NYSE: ORCL – $50.78) beat Wall Street expectations with its fiscal fourth-quarter earnings report, posting annual earnings and revenue growth for the first time since the 2014 fiscal year and sending shares toward record highs. The software giant reported net income of $3.23 billion on sales of $10.89 billion for the final quarter in its 2017 fiscal year, higher by 3%. After adjusting for special items, Oracle reported a profit of $.89 a share. Analysts on average expected the company to report adjusted earnings of $0.78 a share on revenue of $10.46 billion. SaaS (Software as a Service) cloud revenues were up 67% to $964 million and Cloud PaaS (Platform as a Service) plus IaaS (Infrastructure as a Service) revenues were up 40% to $397 million. “Our fourth quarter results were very strong as revenue growth and earnings per share both substantially exceeded the high-end of guidance,” said Oracle CEO, Safra Catz. “We continue to experience rapid adoption of the Oracle Cloud led by the 75% growth in our SaaS business in Q4. This cloud hyper-growth is expanding our operating margins, and we expect earnings per share growth to accelerate in fiscal 2018.”
For the full year ended in May, Redwood City, California-based Oracle earned $2.74 per share vs. $2.61 in fiscal 2016. Early estimates for the upcoming year is for $2.90. The shares of ORCL jumped nearly 10% in early trading on the news. Positions can continue to be held in a well-diversified conservative account for further upside.