Oracle’s stock shakes off decline after upbeat forecast

Oracle’s stock shakes off decline after upbeat forecast

Shares dropped despite earnings beat, then rebounded after forecast topped expectations

Oracle Corp. shares declined in after-hours trading Thursday despite better-than-expected quarterly earnings results but then rebounded after the company’s forecast also surpassed expectations.

Oracle ORCL, -0.42% on Thursday afternoon reported earnings for its second fiscal quarter of $2.44 billion, or 80 cents a share, on revenue of $9.8 billion, up from $9.62 billion a year before. After adjusting for stock-based compensation and other effects, the software company reported earnings of $1.06 a share, up from 90 cents a share a year earlier. Analysts on average expected adjusted earnings of $1 a share on sales of $9.77 billion, according to FactSet.

“Our highly profitable multibillion-dollar Fusion and NetSuite Cloud ERP applications businesses grew revenue 33% and 21%, respectively, in Q2,” Oracle Chief Executive Safra Catz said in Thursday’s announcement. “These two strategic cloud-applications businesses are major contributors to Oracle’s increased operating earnings and consistent earnings-per-share growth.”

Oracle’s stock sank more than 1% in after-hours trading immediately following the release of the results, after declining 0.5% to $59.43 in the regular session, but then moved back to flat after Catz provided her forecast in Thursday afternoon’s conference call. Catz projected that Oracle would collect third-quarter adjusted earnings of $1.09 to $1.13 a share and that revenue would grow by 2% to 4%. Analysts had been projecting adjusted earnings of $1.04 a share and year-over-year revenue growth of less than 1.4%.

Shares reached record highs in October but took a dive after another software giant, SAP SE SAP, +0.02%, issued a warning about its sales and profit; Oracle’s stock had recovered to roughly its levels before SAP’s warning prior to Thursday afternoon’s report.

Overall, Oracle stock has risen 12.3% in 2020, as the S&P index SPX, -0.13% has gained 13.7%.

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