Oracle (ORCL): cautious guidance overshadowed a slim earnings beat. Oracle (ORCL) posted mixed second-quarter 2017 results. Although earnings (including stock-based compensation) of 55 cents per share were in line with the Zacks Consensus Estimate, revenues of $9.07 billion lagged the same.
Earnings (excluding stock-based compensation) decreased 3.2% to 61 cents, which was within the company’s guided range of 59 to 62 cents. Revenue growth of almost 1% (2% in constant currency) was slightly ahead of the bottom end of management’s guided range of 0–3%.
Adverse currency movements impacted earnings by a penny and total revenues by 1% in the quarter, primarily due to strong U.S. dollars. Further, the devaluation of the Egyptian currency in November negatively impacted earnings.
Top-line Details
Oracle’s top-line growth benefited from the ongoing cloud-based momentum. Total cloud revenues (12% of total revenue) soared 66.7% to $1.09 billion in the reported quarter.
Cloud SaaS and PaaS revenues soared 89% year over year to $912 million better than management guided range of 78% to 82%. IaaS revenues increased 6.1% to $175 million.
Cloud bookings were $377 million in the quarter. Oracle stated that SaaS and PaaS billings were up 39% on a year-over-year basis. The company added 1,082 new SaaS customers, 2,225 new PaaS customers and 2,148 IaaS customers. Installed base of PaaS and IaaS is now at 21,219 customers.
Strong cloud results fully offset weak on-premise software revenues (67.5% of total revenue), which declined 3.7% to $6.13 billion. Total cloud and on-premise software revenues grew 2.9% (4% on constant currency) to $7.21 billion.
However, hardware revenues continued to decline in the quarter. Total hardware revenues dropped 9.7% year over year to $1.01 billion. Oracle’s engineered systems grew mid-double digit lead by Exadata that grew over 30% in the quarter.
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