Software developer Oracle Corp. (ORCL, Financial) reported its first-quarter 2018 results after the closing bell on Sept. 14.
The California-based company posted earnings per share of 62 cents for the quarter, beating expectations of 60 cents. Quarterly revenue of $9.2 billion beat estimates of $9.02 billion and grew 7% from the year-ago quarter.
Cloud revenue, an important metric as the company pursues growth in this area, increased 51% year over year to $1.5 billion. This was in line with management’s expectations of 48% to 52% growth and was slightly above analysts’ consensus.
Safra Catz, one of Oracle’s two CEOs, said the company is “off to a very, very strong start” for 2018.
“The sustained hypergrowth in our multibillion-dollar cloud business continues to drive Oracle’s overall revenue and earnings higher and higher,” she said.
Mark Hurd, the other half of the CEO team, said Oracle’s cloud applications business is growing “more than twice as fast” as Salesforce.com Inc. (CRM, Financial), and its enterprise resource planning (ERP) business has 30 times more customers than Workday Inc. (WDAY, Financial), which are two of its main competitors.
The trend in Oracle’s revenue growth over the past decade is illustrated in the graph below.
Shares initially gained nearly 2% in after-hours trading following the earnings beat but fell more than 5% below the closing price of $52.79 after the company provided guidance for the second quarter.
Next quarter Oracle projects to earn between 64 cents and 68 cents per share and anticipates 2% to 4% revenue growth. Cloud revenue is expected to grow 39% to 42%. In contrast, analysts forecast EPS of 68 cents on $9.49 billion in revenue for the second quarter.
With 1.01% of outstanding shares, First Eagle Investment (Trades, Portfolio) has the largest position in Oracle among the gurus. A total of 36 gurus are shareholders.
Disclosure: I do not own any stocks mentioned.
