Oracle, whose shares have risen about 40 per cent this year, is well positioned to benefit from cloud computing but a crowded space of rivals, including Microsoft Corp’s Azure, Amazon.com Inc.’s Amazon Web Services, Salesforce.com and IBM Corp, will keep the heat on the company
Hurt by competition in the cloud computing space, enterprise software firm Oracle Corp fell short of Wall Street expectations for first-quarter revenue on Monday.
After the company forecast second quarter adjusted earnings per share above expectations, shares of the Austin, Texas-based company pared losses and were down 1.4 per cent in extended trading.
According to IBES data from Refinitiv, the company expects adjusted earnings per share to be between $1.09 and $1.13, above analysts’ average estimate of $1.08.
Analysts say Oracle, whose shares have risen about 40 per cent this year, is well positioned to benefit from cloud computing but a crowded space of rivals, including Microsoft Corp’s Azure, Amazon.com Inc.’s Amazon Web Services, Salesforce.com and IBM Corp, will keep the heat on the company.
“Expectations would be for revenue forecasts to continue moving higher”, said Jack Andrews, analyst at Needham & Co.
Oracle, which counts Zoom Video Communications as one of its customers, to bolster its footing in the cloud computing space, has been ramping up investment to set up more data centres that can be rented out to clients as they expand and shift operations to the cloud computing.
Oracle said, with an annual run rate of $10 billion, its two new cloud computing businesses, software-as-a-service and infrastructure-as-a-service, made up 25 per cent of the company’s total revenue.
“While it’s unclear how this contribution compares with expectations, it’s fair to say this is an additional data point indicating Oracle is behind some competitors in a significant way”, said Scott Kessler, analyst at Third Bridge.
Total revenue rose 4 per cent to $9.73 billion in the quarter ended 31 August. Analysts were expecting revenue of $9.77 billion.
Excluding items, Oracle earned $1.03 per share, topping analysts’ expectations of 97 cents per share.
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