Oracle Posts Upbeat Q2 Results; Shares Jump

Shares of Oracle Corporation (ORCL) jumped 10.4% in the extended trading session on Thursday after the American multinational computer technology company reported upbeat second-quarter Fiscal 2022 results. Strong cloud business revenues drove the results.

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Results in Detail

The company reported adjusted earnings of $1.21 per share, which comfortably beat the consensus estimate of $1.11 per share and grew 14% year-over-year. Notably, the results beat the company’s guidance of $0.10 per share.

Additionally, total revenues of $10.4 billion grew 6% year-over-year and topped analysts’ expectations of $10.21 billion.

Cloud services and license support revenues grew 6% year-over-year to $7.6 billion, while Cloud license and on-premise license revenues came in at $1.2 billion, up 13%.

Furthermore, total Cloud Revenue (IaaS plus SaaS) surged 22% to $2.7 billion, while Fusion ERP cloud revenue and NetSuite ERP cloud revenue grew 35% and 29%, respectively. (See TipRanks Top Stocks)

Capital Deployment

Oracle’s board of directors increased the share repurchase authorization by $10 billion. A quarterly cash dividend of $0.32 per share of common stock was also announced. This dividend will be paid on January 19, 2022, to stockholders of record as of January 7.

Official Comments

In response to the second-quarter results, Oracle CEO Safra Catz said, “Constant currency revenue beat guidance by $200 million. These strong results are being driven by the 22% growth of our infrastructure and applications cloud businesses which are approaching $11 billion in annualized revenue.”

Looking forward, Oracle’s CTO Larry Ellison commented, “Oracle’s Autonomous Database and new MySQL Database with HeatWave are the world’s two highest-performance databases. Because of their extreme high-performance, both products present huge growth opportunities for our cloud infrastructure business. These two databases will sustain Oracle’s database market and technology leadership for years to come.”

Wall Street’s Take

Overall, the stock has a Hold consensus rating based on 6 Buys, 13 Holds, and 1 Sell. The average Oracle price target of $95.47 implies 7.55% upside potential. Shares have jumped 49.2% over the past year.

Risk Analysis

According to the new TipRanks Risk Factors tool, Oracle stock is at risk mainly from three factors: Tech and Innovation, Finance and Corporate, and Ability to Sell, which contribute 23%, 19%, and 19%, respectively, to the total 31 risks identified for the stock.