Oracle Corp.’s (ORCL.N) shares rose on a strong sales forecast, signaling the world’s second-largest software maker expects greater customer demand in its transition to cloud-based computing.
Revenue will increase 2 per cent to 4 pe rcent in the current quarter, holding currency exchange rates constant, with higher growth through the second half of the fiscal year, Chief Executive Officer Safra Catz said Monday in a conference call with analysts. Adjusted profit is projected at 86 cents a share to 88 cents a share in the fiscal third quarter. Analysts estimated 84 cents.
Oracle earlier reported fiscal second-quarter sales that were in line with analysts’ estimates. Shares increased about 5 per cent in extended trading.
Key Insights
Catz and Chief Executive Officer Mark Hurd have sought to move the information technology company’s 430,000 customers to internet-based software from programs housed on their corporate servers, as a way to keep up with the rapid sales growth of Amazon.com Inc.’s cloud unit, Salesforce.com Inc. and others. Sales were little changed at US$9.56 billion in the fiscal second quarter. Analysts, on average, had projected US$9.52 billion, according to data compiled by Bloomberg. Revenue from Oracle’s cloud services and license support, which includes maintenance fees for its traditional software, grew 2.7 per cent to US$6.64 billion. Oracle’s new cloud and on-premise licenses sales fell 8.5 per cent to US$1.22 billion.Market Reaction
- Oracle shares rose to a high of US$48.18 in extended trading after closing US$45.73. The stock has declined 3.3 per cent this year.
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