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https://www.barrons.com/articles/oracle-earnings-blow-past-guidance-but-stock-slips-as-investors-take-profits-51623790279

Oracle Earnings Blow Past Guidance, but Stock Slips as Investors Take Profits

By
Eric J. Savitz
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Oracle Chairman Larry Ellison.

Justin Sullivan/Getty Images

Oracle  posted better-than-expected results for its fiscal fourth quarter ended May 31, as the enterprise software company saw strength across its enterprise applications portfolio and continued triple-digit growth for its cloud infrastructure business.

But the stock is trading modestly lower after hours as some investors take profits after a nearly 30% rally in the shares since mid-March. Oracle shares (ticker: ORCL) in late trading have slipped 2.4%, to $79.70.

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For the quarter, Oracle posted revenue of $11.2 billion, up 8%, or 4% in constant currency—the company’s best quarterly growth rate in a decade. The top line was ahead of the company’s guidance range, which called for 5% to 7% growth, or 1% to 3% in constant currency. 

Non-GAAP profits were $4.5 billion, or $1.54 a share, likewise ahead of the guidance range of $1.28 to $1.32 a share. On a GAAP basis, the company earned $4 billion, or $1.37 a share. Operating cash flow was $15.9 billion, up 21%.

Oracle reported strength across its application portfolio, with 46% revenue growth for Fusion ERP (financial software for large companies), 35% growth for Fusion HCM (HR software for large firms), and 26% growth for NetSuite ERP (financial software for small to midsize businesses). The company said that its cloud infrastructure business, including Oracle Cloud and Autonomous Database software, grew more than 100%.

For the full year, revenue was $40.5 billion, up 4%, or 2% in constant currency. Fiscal-year profits were $14.1 billion, or $4.67 a share; on a GAAP basis, the company earned $13.7 billion, or $4.55 a share.

“Our Q4 performance was absolutely outstanding,” Oracle CEO Safra Catz said in a statement. “Our multibillion-dollar Fusion and NetSuite cloud applications businesses saw dramatic increases in their already rapid revenue growth rates.”

Oracle didn’t provide any guidance in the release, but is likely to discuss its outlook on the upcoming call with investors.

Write to Eric J. Savitz at eric.savitz@barrons.com

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