Can Oracle Buy Its Way To Win Over Amazon?

Oracle (NYSE: ORCL) has had a few rough quarters in the recent past. Analysts are concerned that it is taking longer than expected to deliver on the cloud strategy. The recently announced results seemed to dispel some of the concerns as Oracle managed to surpass cloud-based revenue expectations.

Photo Credit: May Wong/Flickr.com

Oracle’s Financials

Revenue for the second quarter was flat over the year, and recorded a 2% growth over the year on constant currency basis to $9.56 billion. The market was looking for revenues of $9.54 billion for the quarter. EPS of $0.80 was ahead of the market’s forecast of $0.78.

Earlier this year, Oracle redefined its business segments and now no longer reports revenues it generates from its Cloud infrastructure and platform services.

Total cloud services and license support revenues grew 3% over the year to $6.64 billion, accounting for 69% of its quarterly revenues. Within the segment, total cloud license and on-premise license fell 9% over the year to $1.22 billion. According to Oracle, the Fusion ERP and Fusion HCM now account for more than $2.6 billion in annualized revenues for the company.

Total hardware revenues reported a decline of 5% over the year to $891 million and Services revenues fell 5% to $817 million.

During the quarter, Oracle repurchased 203 million shares worth $10 billion. It also declared a quarterly dividend of 19 cents per share.

For the current quarter, Oracle expects to deliver $0.86-$0.88 in earnings per share, compared with the Street’s forecast of $0.85 per share. The continued growth in cloud-based revenues is expected to drive the growing margins. Oracle is targeting to end the quarter with revenues growing between 2%-4% over the year.

Oracle’s Focus Area

Oracle currently is focused on delivering on its Autonomous Database initiative. It recently released the next-generation autonomous database, which is supported by machine learning. It is pairing its Autonomous Database with its new Generation 2 Cloud infrastructure that is expected to help drive more market share for the company.

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Disclaimer: More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion ...

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