Oracle Corp.’s quarterly sales jumped 18 per cent, buoyed by the software maker’s transition to cloud computing and the acquisition of health records provider Cerner.

Sales were US$11.4 billion in the fiscal first quarter, meeting analysts’ average estimate, according to data compiled by Bloomberg. Profit, excluding some items, was US$1.03 a share. Oracle said currency fluctuations reduced the earnings by 8 cents a share. Analysts projected US$1.06 a share. 

Cloud revenue -- the highly watched segment that Oracle has been trying to expand -- rose 45 per cent to US$3.6 billion in the period ended Aug. 31, the Austin, Texas-based company said Monday in a statement. Growth was 19 per cent last quarter, before the Cerner deal closed. 

Oracle shares gained about 2.3 per cent in premarket trading Tuesday, after closing at US$77.08 in New York on Monday. The stock has slipped 12 per cent this year.

The company, known for its database technology, sells business software applications that can be used over the internet as well as offering customers the ability to store and compute information through Oracle’s servers, called cloud infrastructure. Inc. and Microsoft Corp., the leaders in that market, are far ahead of Oracle. Executives say the US$28.3 billion Cerner acquisition will give the company inroads in the health care industry, which has been comparatively slow to adopt cloud technology.

“The company’s application and infrastructure cloud businesses now account for over 30 per cent of total revenue,” Chief Executive Officer Safra Catz said in the statement. “As our cloud businesses become a larger-and-larger percentage of our overall business, we expect our constant currency organic revenue growth rate to hit double-digits with a corresponding increase in earnings per share.”

Oracle completed its purchase of Cerner in June. The digital medical records provider generated US$1.4 billion in sales in the period, which Catz called its best revenue quarter ever. 

“We expect Cerner to do even better in the coming quarters as we develop an all-new suite of health care cloud services,” she said. 

Cerner Pop | Oracle's cloud growth jumped after closing its acquisition of Cerner
Oracle’s strong sales growth -- even after removing the Cerner contribution -- “bodes well for the software sector,” wrote Bloomberg Intelligence analyst Anurag Rana. “Though we were expecting application growth to stay strong, we were particularly surprised by Oracle’s infrastructure strength despite worsening economic conditions.”

Catz said sales in the current quarter will gain 15 per cent to 17 per cent and cloud revenue, including Cerner’s contribution, will be increase as much as 46 per cent compared with the period a year earlier. Excluding Cerner, Oracle’s cloud sales will jump about 30 per cent in the fiscal year, she said on a conference call after the results.

In the fiscal first quarter, sales of the Fusion application for managing corporate finances rose 33 per cent, compared with 20 per cent the previous period. Revenue from NetSuite’s enterprise planning tools, targeted to small- and mid-sized businesses, increased 27 per cent, the same as the previous quarter. 

In June, TikTok announced that all US traffic is being moved to Oracle’s cloud servers. The popular short-video platform, owned by China-based ByteDance Ltd., is working to convince US regulators that user data can’t be accessed by Chinese authorities.