Oracle Stock Rallies as Results, Outlook Top Wall Street Estimates

It’s day two for Oracle shares. The cloud-based database software firm logged in revenue of $10.43 billion this quarter, beating analysts’ expectations of $10.30 billion. This may indicate Oracle stock is finally reaching escape velocity after a dizzying descent in price.

“This was a good quarter for us. Software subscription revenue was up 27 percent.” CEO Mark Hurd said. “Our cloud business continued to be on fire. License Cloud revenue growth was solid, which was up 19% as we saw continued strong demand for our cloud platform from our customers.”

Server revenue declined in the second quarter, but Oracle was able to still surpass analysts’ estimates. For the current quarter, analysts are looking for revenue of $11.3 billion. Oracle expects to earn 63 cents per share. For full-year 2019, the company reported it will see revenue of $40.8 billion and earnings of $2.70 per share. Analysts were only looking for earnings of $2.66 per share.

The only thing that happened that wasn’t to Oracle’s advantage was stock dilution, as chief financial officer Safra Catz noted.

“While our stockholders continue to lose value because of the current CFO succession plan, stock issuances continue in advance of the August 2019 transition. The net diluted impact of all stock issuances in the second quarter was approximately 2.2% of our shares outstanding in both GAAP and non-GAAP earnings. We will see similar dilution in the third quarter.”

Shares have taken a beating for two years now, after downgrading in December 2016 amid a cloud-computing push that analysts said was overly ambitious.

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