Oracle reports its ‘highest quarterly organic revenue growth rate’

Oracle Corporation (NYSE: ORCL) shares slid 5.0% initially in extended trading on disappointing Q3 earnings. The stock, however, recovered entirely later on as the management’s outlook was in line with expectations.

Key takeaways from Oracle Q3 report

• Net income registered at $2.32 billion versus the year-ago figure of $5.02 billion.
• Per-share earnings stood at 84 cents, a steep decline from $1.68 a share last year.
• Adjusted EPS printed at $1.13, below the FactSet consensus for $1.18 a share.
• Revenue jumped 4.0% in fiscal Q3 and was in line with the experts’ forecast.
• Cloud infrastructure revenue, in constant currency, was up 47% YoY.
• Fusion ERP and NetSuite ERP revenue noted a 35% and 29% increase, respectively.
• Total cloud revenue at $2.80 billion came in 24% higher than the same quarter last year.

Late last year, Oracle signed a multi-year cloud deal with Xerox. ORCL is now down over 10% for the year.  

Q4 guidance and quarterly cash dividend

For the current quarter, Oracle forecasts its adjusted per-share earnings to fall in the range of $1.35 to $1.39 on a 3.0% to 5.0% growth in revenue. This compared to analysts at $1.38 in EPS (adjusted) and 4.8% increase in revenue. In the earnings press release, CEO Safra Katz said:

In Q3, Oracle delivered over 7.0% constant currency revenue growth – our highest quarterly organic revenue growth rate since we began our transition to the cloud. The big story is that our overall revenue growth is being driven by both our rapidly growing Cloud Infrastructure and Cloud Applications businesses.

The guidance is excluding contributions from its recently announced acquisition of Cerner. Oracle declared 32 cents a share in quarterly cash dividend.