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Although Oracle outperformed the consensus estimate for fiscal Q2 2022, the company provided a lighter-than-expected earnings forecast.
Oracle Corporation (NYSE: ORCL) posted better-than-anticipated results in its fiscal Q2 2022 earnings report. The computer tech multinational surpassed analysts’ estimates on the top and bottom lines as its cloud infrastructure revenue jumped. Oracle’s shares, which have been ahead of the broader indexes this year, climbed in extended trading following the positive report. However, the tech giant provided a lighter earnings forecast that fell below analysts’ expectations.
Oracle Fiscal Q2 2022
For fiscal Q2 2022, Oracle posted a sizable revenue of $12.28 billion compared to the consensus estimate of $12.05 billion. In addition, the company reported adjusted earnings per share (EPS) for the same period at $1.21, beating the $1.18 analysts expected. However, Oracle chief executive officer Safra Catz intimated on a conference call that fiscal Q3 adjusted EPS would be between $1.17 and $1.21. In addition, Catz called projected revenue growth for the fiscal third quarter between 17% and 19%. Meanwhile, analysts polled by Refinitiv had it as $1.24 per share and revenue of $12.34 billion, implying a 17.3% growth.
Oracle’s total revenue in the fiscal second quarter climbed 18% year-over-year (YoY). Furthermore, Cerner, a $28 billion Oracle healthcare software acquisition, contributed $1.5 billion to Oracle’s bottom line. Oracle acquired Cerner in June.
According to Oracle, its adjusted earnings should have been 9 cents higher without the impact of foreign exchange rates. The company’s revenue for the latest quarter was reportedly more than $200 million higher than the high end of its guidance range. Catz particularly noted strong revenue pull in cloud infrastructure and cloud-based applications.
Oracle also grew its adjusted operating margin from 39% in the previous quarter to 41%. The company’s net income for the period ended November 30th came in at $1.74 billion compared with a net loss of $1.25 billion YoY. Last year’s deficit was due to a judgment payment tied to former co-CEO Mark Hurd.
Hurd died in 2019.
Oracle Cerner Development
Despite acquiring Cerner roughly 6 months ago, Catz said Oracle is still integrating Cerner. As she put it:
“We are already having some level of savings but ultimately, just so that you understand, our expectation is we will run them at typical Oracle margins.”
Catz further stated:
“So, we’ve got quite a way to go. And I think over the next couple of quarters you’ll see continued improvement as we’ve done some of our operational integration and simultaneously, I think they continue to over-perform for us.”
Oracle Chairman and CTO Larry Ellison also exposited on the Cerner development and growth at Oracle. According to him, Cerner has directly contributed to Oracle’s growth since the acquisition. Ellison also said Oracle has improved the healthcare software’s technology.
However, Ellison also suggested that Oracle was still in the formative phase of its plans to modernize healthcare information systems. In addition, the Oracle Chairman cited the Covid pandemic as creating an urgent global need to transform and enhance national healthcare systems.