Oracle Corp (ORCL) - Get Report shares turned slightly lower Tuesday after the cloud computing group posted stronger-than-expected quarterly earnings and surprised investors with a bullish global outlook.
Oracle said non-GAAP earnings for the three months ending in November, the company's fiscal second quarter, came in at 80 cents a share, firmly ahead of the Street forecast of 78 cents and rising 16% from the same period last year. Group sales, Oracle said, were pegged at $9.62 billion, again topping analysts' forecasts, while cloud revenues rose 2.7% to $6.64 billion and gross margins for cloud services and license support hit 86%.
"As we continue to scale and grow our cloud business, I expect our gross margins will ultimately go higher," CEO Safra Catz told investors on a conference call late Monday. " I continue to expect that second half revenue growth will be higher and we remain committed to delivering a higher constant currency growth rate for all of fiscal 2019 when compared to last fiscal year."
Oracle shares declined 0.14% to $45.67 at midday Tuesday.
The company also said it sees current quarter earnings of between 86 cents and 88 cents a share, topping the 84 cent Street forecasts, and said it expects full year revenue growth of around 3% on a constant currency basis.
We think Oracle delivered impressive top-line results and guidance against low expectations," said BMO Capital Markets Keith Bachman. "We think the top-line guide, including the likelihood of achieving 3% (constant currency revenue) growth in FY19, combined with aggressive share buybacks will support the shares."
Oracle is Real Money's Stock of the Day. Click here to read Real Money's comprehensive coverage of the stock throughout the day.