Oracle reports 18% revenue growth after Cerner deal closes

Oracle reported revenue that met expectations on Monday, while revenue and quarterly guidance fell short of analysts’ estimates.

Revenue rose 18% in the quarter from a year earlier, thanks to the contribution of recently acquired software maker Cerner.

Here’s how the company fared:

• Earnings: $1.03 per share adjusted, versus $1.07 per share as expected by analysts, according to Refinitiv.
• Income: $11.45 billion versus the $11.45 billion analysts were expecting, according to Refinitiv.

Revenue growth in the quarter ended Aug. 31 accelerated from the 5 percent reported in the previous quarter, according to a statement.

Oracle received a $1.4 billion contribution from Cerner after the $28 billion acquisition closed in the quarter.

Net income fell to $1.55 billion from $2.46 billion in the prior period. Oracle said it would have seen 8 cents more in adjusted earnings per share if not for unfavorable foreign exchange rates.

Oracle’s cloud services and license support category generated $8.42 billion in revenue, up 14% and above the StreetAccount consensus of $8.27 billion.

Oracle’s applications and infrastructure cloud businesses now account for more than 30 percent of total revenue, CEO Safra Katz said in a statement. Quarterly cloud infrastructure revenue jumped 52% to $900 million.

In addition to completing the Cerner deal, Oracle announced the availability of its database software through Microsoft’s Azure public cloud, which runs on Oracle’s own cloud infrastructure.

In terms of guidance, Oracle said it expects $1.16 to $1.20 in adjusted earnings per share and revenue growth of 15% to 17% in the fiscal second quarter. Analysts polled by Refinitiv had expected $1.27 per share and $12.17 billion in revenue, suggesting nearly 18% growth.

Catz said it expects exchange rates to have a 5% to 6% negative impact on revenue and a hit to earnings per share of up to 7 cents per share in the current quarter.

Larry Ellison, Oracle’s co-founder, chairman and chief technology officer, boasted of additional business coming to Oracle Cloud Infrastructure, or OCI.

“I’ve personally talked to some of Amazon’s best-known brands that run on AWS,” he said. “And the AWS bill is getting very large. And they can save a huge amount of money by switching to OCI. And I expect in the next quarter we will announce some brands, some companies moving from Amazon to OCI, which will shock you. I’ll stop there.”

Excluding after-hours movement, Oracle shares are down nearly 12% year to date; The S&P 500 is down about 14% year to date.

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