Oracle Climbs After Q2 Earnings
Oracle (NASDAQ: ORCL), the leading global enterprise software company and one of the most important stocks in the Nasdaq 100, released its fiscal second quarter earnings results after the closing bell on Tuesday. The company's results were ahead of Wall Street estimates across the board. In the premarket on Wednesday, Oracle traded up almost three percent.
"Q2 performance was strong and broad based as all geographies reported double-digit revenue growth in new software license and cloud subscriptions," said Oracle President, Mark Hurd. "Applications, middleware and database all had double-digit growth in new software license and cloud subscriptions, with applications leading the pack with growth of over 30%."
The Redwood City, California-based tech giant said that second quarter net income was $2.8 billion or $0.53 per share, compared to $2.2 billion or $0.36 per share, in last year's second quarter. On an adjusted basis, which is comparable to analysts' consensus, Oracle reported net income of $3.1 billion or $0.64 per share, versus $2.8 billion or $0.54 per share, in last year's corresponding quarter. This beat analysts' consensus EPS estimates of $0.61 by three cents.
Total revenue in the period was up 3 percent to $9.09 billion from $8.79 billion last year. Adjusted revenue was also up 3 percent to $9.11 billion versus $8.81 billion in last year's second quarter. This compared to analysts' consensus revenue estimates of $9.03 billion.
On a constant currency basis, revenue in the second quarter was up 5 percent at Oracle and earnings per share rose 26 percent.
Total software revenue in the period climbed 10 percent to $6.6 billion. New software licenses and cloud software subscriptions were particularly strong, gaining 17 percent to $2.4 billion. Software license updates and product support revenue was up seven percent to $4.3 billion.
Service revenue and hardware revenue fell five percent and 16 percent, respectively. Service sales came in at $1.1 billion and hardware systems sales were $1.3 billion, according to the company.
Operating margin for the second quarter was up 300 basis points to 38 percent versus 35 percent in the prior year period. Adjusted operating margins was 47 percent compared to 46 percent last year. Year-to-date, Oracle has now gained around 29 percent as the stock continues to be a leader in the large-cap tech space under the guidance of founder and CEO Larry Ellison and former Hewlett-Packard CEO Mark Hurd who serves as the President of of the company.
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