Oracle tops analysts’ estimates for earnings and revenue in the first quarter

Written by: Wajeeh Khan
September 10, 2020
  • Oracle tops analysts’ estimates for earnings and revenue in the first quarter.
  • The American multinational saw a 2% growth in its revenue in fiscal Q1.
  • Oracle gives stronger than expected guidance for the fiscal second quarter.

Oracle Corporation (NYSE: ORCL) published its quarterly financial results on Thursday after the bell that came in stronger than what the analysts had anticipated for its fiscal first quarter. On the back of its hawkish performance in Q1, the company also gave upbeat financial guidance for the future.

Shares of the company jumped roughly 4% in extended trading on Thursday. Including the price action, Oracle Corporation now boasts a per-share price of £46.35 versus a sharply lower £30.70 per share in March when COVID-19 weighed heavily on businesses.

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At the start of the year, the company’s stock was seen trading at £42.14 per share. Here’s what you need to know about how to invest in the stock market.  

Oracle’s Q1 financial results versus analysts’ estimates

According to Refinitiv, experts had forecast the company to print £7.18 billion in revenue in the first quarter. Their estimate for earning per share was capped at 67.17 pence per share. In its report on Thursday, Oracle topped both estimates posting a higher £7.32 billion in revenue and 72.65 pence of adjusted earnings per share in Q1.

On a year over year basis, the American multinational saw a 2% growth in its quarterly revenue. At £5.43 billion, Oracle’s revenue from cloud services and licence support noted a 2% annualised growth and was marginally higher FactSet consensus. The computer technology firm recently secured new business from Xactly and McDonald’s.

Revenue from its cloud license and on-premise license business registered at £692.10 million that translated to a 9% year over year increase. Analysts had anticipated £585.08 million of revenue from this segment in Q1. President Trump said last month that Oracle could partially handle TikTok (video-sharing app).

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Oracle’s guidance for the fiscal second quarter

For the fiscal second quarter, the Santa Clara-based company now expects its adjusted earnings per share to fall in the range of 76.55 pence to 80 pence on a 1% to 3% growth in revenue. Experts, on the other hand, forecast a lower 73.43 pence of adjusted earnings per share for Oracle in Q2 on close to no growth in its revenue.

In the prior quarter (Q4), Oracle had revealed a 6% annualised decline in its revenue, as per the report published in June.

At the time of writing, Oracle Corporation is valued at £137.43 billion and has a price to earnings ratio of 18.63.