Oracle Corp. share price up, Q2 results beat forecasts as cloud push proves fruitful

Oracle Corp. reported that profit and sales in the second fiscal quarter ended November 30th topped analysts forecasts, marking a successful transfer of power to co-Chief Executive Officers Ms. Safra Catz and Mr. Mark Hurd who took over three months ago.

According to the companys statement, Oracles profit excluding stock-based compensation, restructuring-related changes and other items amounted to 69 cents per share, topping estimates for 68 cents. Net income fell by 2% to $2.5 billion from $2.55 billion a year earlier, but earnings per share were flat at 56 cents as the number of outstanding shares declined.

The company also revealed that its revenue over the period rose by 3.5% to $9.6 billion, exceeding projections to have generated $9.5-billion in sales. However, revenue growth, similar to other US companies, was dragged down by the appreciation of the US dollar. Excluding currency headwinds, Oracles revenue would have jumped by 7%.

Revenue generated by oracles cloud-computing operations soared 45% to $516 million over the second three months of the financial year. There was also a 3.6% increase in revenue generated by new software license business, which was estimated at $2.05 billion. Operating costs rose by 3.3% during the period.

This was the first quarter with Mark Hurd and Safra Catz leading the company, after they succeeded Oracles co-founder Larry Ellison as co-chief executive officers three months ago. The company has been focused on boosting revenue by introducing new software and acquiring companies to lure corporate customers, after reporting sales growth of less than 5% for 13 consecutive quarters.

The co-founder and Chairman of Oracle – Mr. Larry Ellison – said that his company is gaining on Salesforce.com and predicted Oracle would overtake its competitor.

“Stay tuned, it’s going to be close,” Mr. Ellison said. “We’re catching up to them and we’re catching up to them very quickly.”

The U.S.-based company also provided a projection for its third fiscal quarter, which ends February. Oracle expects profit in the range of 65 to 70 cents per share on the back of flat to 4% higher sales compared to a year earlier. Analysts projected a profit of 73 cents a share with a 4% increase in revenue to $9.68 billion.

Oracle Corp. settled yesterday 1.30% higher at $41.16 per share in New York, marking a one-year change of +22.39% and valuing the company at $182.39 billion. Shares surged 5.08% by 9:10 GMT to $43.25 in Thursday pre-market trading. According to CNN Money, the 35 analysts offering 12-month price forecasts for Oracle Corp. have a median target of $45.00, with a high estimate of $50.00 and a low estimate of $28.00. The median estimate represents a +9.33% increase from the last price of $41.16.