Does Oracle Deserve More Credit for Q2 Results?

Oracle Corp. (NYSE: ORCL) released fiscal first second-quarter financial results after markets closed Thursday. The firm reported $1.06 in earnings per share (EPS) and $9.8 billion in revenue which compared with consensus estimates of $1.00 in EPS and revenue of $9.79 billion. In the fiscal second quarter of last year, the software giant reported EPS of $0.90 on $9.62 billion in revenue.

Total quarterly revenues were higher by 2%, compared to the same period of last year. Cloud Services and License Support revenues totaled $7.1 billion, while Cloud License and On-Premise License revenues were $1.1 billion.

Management noted that Oracle’s highly profitable multi-billion dollar Fusion and NetSuite Cloud ERP applications businesses grew revenue 33% and 21% respectively in second quarter. These two strategic cloud applications businesses are major contributors to Oracle’s increased operating earnings and consistent earnings per share growth.

At the same time, short-term deferred revenues were $8.1 billion. Operating cash flow for the trailing 12 months was $14.0 billion.

The board of directors declared a quarterly cash dividend of $0.24 per share of outstanding common stock. This dividend will be paid to stockholders of record as of the close of business on January 7, with a payment date of January 21.

On the books, cash, cash equivalents and marketable securities totaled $38.6 billion at the end of the quarter, versus $43.1 billion at the end of the previous fiscal year.

The company did not issue any guidance for the fiscal third quarter. Analysts are calling for $1.04 in EPS and $9.95 billion in revenue for the coming quarter.

Oracle stock closed Thursday at $59.48, in a 52-week range of $39.71 to $62.60. The consensus price target is $63.31. Following the announcement, the stock was initially down about 1% at $58.60 in the after-hours session.