Oracle (ORCL) stock jumped late Monday, after the tech giant reported fiscal first quarter earnings and sales that exceeded expectations. Oracle also announced a strategic partnership with cloud-services rival Amazon (AMZN) Web Services.
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For its August-ended quarter, Oracle said that it earned an adjusted $1.39 per share on sales of $13.3 billion. On average, analysts projected the Austin, Texas-based company would post adjusted earnings of $1.33 per share from sales of $13.2 billion.
For the same period a year earlier, Oracle posted adjusted earnings of $1.19 per share on sales of $12.5 billion.
“As cloud services became Oracle’s largest business, both our operating income and earnings per share growth accelerated,” Oracle Chief Executive Safra Catz said in a news release.
Catz added in the news release that the “biggest news of all was signing a multi-cloud agreement with AWS – including our latest technology Exadata hardware and Version 23ai of our database software – embedded into AWS cloud datacenters.”
On the stock market today, Oracle stock is up more than 6% at 149.22 in recent after-hours action.
This is a breaking news story and will be updated with further earnings coverage. Read a preview of Oracle’s earnings report below.
Oracle (ORCL) stock is ahead nearly 35% so far this year, but that momentum will be put to the test Monday.
The database software giant will report fiscal first quarter earnings after the market closes today. Analysts will be closely watching for signs of progress for the 47-year-old company’s push to become a cutting-edge provider of cloud services and the computing horsepower required for artificial intelligence.
The earnings statement kicks off a busy week for the company. Oracle’s annual CloudWorld conference starts Tuesday in Las Vegas. There, Oracle stock analysts are expecting new announcements for OCI and other parts of the business.
Here’s what to know ahead of the report:
Oracle Stock: Q1 By The Numbers
For Oracle’s quarter ended Aug. 31, analysts polled by FactSet are expecting the company’s adjusted earnings to grow 12% year over year to $1.33 per share. Revenue is forecast to increase 6.3% year over year to $13.2 billion.
Another number to watch: The growth rate of Oracle’s cloud infrastructure business. OCI, as it’s known, is a crucial part Oracle’s shift to an enterprise cloud-services provider competing with Amazon.com‘s (AMZN) Amazon Web Services and Microsoft (MSFT) Azure.
Oracle stock has benefited this year as the company has signed on AI startups to OCI and built a backlog of cloud-services demand.
Oracle Chief Executive Safra Catz told analysts in June that Oracle signed more than 30 AI-related sales contracts, totaling $12.5 billion, in its May-ended quarter alone. The commentary helped send Oracle stock 13% higher following its fiscal Q4 report in June, even though Oracle’s overall revenue missed expectations.
For Q1, investors expect Oracle to post year over year cloud infrastructure sales growth of about 46%, Jefferies analyst Brent Thill wrote in a recent client note.
Oracle’s cloud infrastructure revenue increased 42% year over year to $2 billion for its May quarter. Sales jumped 49%, 52% and 66% in the quarters prior to that.
One challenge for Oracle is building enough AI-capable data centers to meet demand. Oracle’s remaining performance obligations, or contracted work, grew 44% year over year to $98 billion as of its May quarter.
Thill said that Oracle’s backlog growth “will need to remain strong in (fiscal Q1) in order for the stock to continue working.” Thill is neutral on Oracle stock.
Oracle CloudWorld, Analyst Day On Deck
Later this week, Oracle will highlight its cloud offerings during a conference in Las Vegas. That includes an analyst day Thursday.
Publishing its earnings statement and hosting a conference the same week creates as “interesting setup” for Oracle’s Q1, Barclays analyst Raimo Lenschow told clients in a recent note.
He said the more immediate results could appear more mixed, while the conference could offer more positive data points on Oracle’s customer traction and progress improving its margins.
“We continue to like the Oracle story and think long-only investors should focus on the long-term progress (multi-year growth acceleration) rather than time a quarter, particularly this seasonally small Q1,” Lenschow wrote. Lenschow rates Oracle a positive overweight.
Oracle Stock In Flat Base
On the stock market today, Oracle stock is trading roughly flat at 142 in morning trades.
MarketSurge shows that Oracle stock has formed a flat base pattern and is approaching a buy point of 146.59. In June, Oracle stock broke out above a 132.77 buy point from a cup base, according to MarketSurge pattern recognition.
Shares have gained 34% year to date, ahead of a 15% gain for the S&P 500. But Oracle’s 14% gain in the past 12 months is lagging a 22.5% rise for the S&P 500.
Meanwhile, Oracle stock has an IBD Composite Rating of 81 out of 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
Further, Oracle’s IBD Relative Strength Rating is 86 out of 99. The RS Rating means that Oracle has outperformed 86% of all stocks in IBD’s database over the past year.
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