Oracle’s stock moves higher on surging cloud infrastructure revenue growth
Oracle Corp. comfortably beat first-quarter expectations today, driven by strong growth in its cloud infrastructure business, and that boosted its stock by about 4% in late trading.
The database giant reported earnings before certain costs such as stock compensation of $1.92 per share. That was a lot better than expected, as Wall Street analysts were looking for earnings of just $1.74 per share. Revenue for the period rose almost 30% from a year earlier, to $19.35 billion, surpassing the analyst consensus estimate of $19.14 billion. All told, Oracle posted net income of $4.68 billion in the quarter, up from $2.93 billion in the same period one year ago.
For the current quarter, Oracle said it’s targeting earnings of between $1.85 and $1.93 per share on revenue growth of between 30% and 34%. That was more or less in line with expectations. Wall Street is looking for earnings of $1.89 per share on sales of $21.2 billion, which would represent growth of 32%.
Oracle’s momentum in the last couple of years is almost exclusively a result of its fast-growing cloud infrastructure business, as the company scrambles to become a key player in the artificial intelligence boom. But the company is competing with hyperscalers like Amazon Web Services Inc. and Google LLC, which both have much stronger cash positions and superior credit ratings than Oracle, which now sits on a $125 billion debt pile. It ended the quarter with a negative free cash flow of $5.4 billion, way down from minus $362 million one year ago.
