Oracle's revenue is up just 2% year-over-year, and net income is down 1%, but the results still beat analysts estimates. Nomura analyst Rick Sherlund said the drop in sales is "favorable after a few disappointing quarters in February and May." The sales drops are actually in line with the company's guidance.
Sales of Oracle cloud services rose 35% in the quarter, and revenue from the services rose 20%. In a call to analysts Oracle president Safra Catz said the company "decided that we were going to really lean in to the cloud to get market share."
The company also claimed that sales of its servers increased in the quarter, though it wouldn't give any exact numbers. Orcale's hardware division has struggled in the past as other companies switch t the cloud.
Shares of other IT hardware companies HP (HPQ), EMC (EMC), NetApp (NTAP), and Nimble Storage (NMBL) are all up on news of the positive hardware sales.
As it tries to push into more cloud services Oracle has to compete with companies such as Amazon (AMZN), Microsoft (MSFT), and Salesforce (CRM). This quarter seems to indicate that it can compete with those companies despite being a legacy competitor in the technology space.
TheStreet Ratings team rates ORACLE CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation: