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Oracle profits well above Wall Street expectations

by on11 March 2022

Cloud is cool for Catz

Oracle forecast fourth-quarter profit above Wall Street estimates as the software outfit expects its heavy cloud investments to pay off, as more businesses ramp up their spending to support hybrid work and transition to cloud.

The company's strong forecast, which was disclosed on a call with analysts, pulled up its shares from a nearly six per cent slide in extended trading triggered by tepid third-quarter profit due to higher spending for its cloud services.

Oracle said it is on track to spend $4 billion in capital expenditure this year as it looks to build more data centres and improve its cloud services that trail behemoths like Microsoft, Amazon and Alphabet's Google.

Oracle said its third-quarter operating expenses were up as the company invested aggressively to meet customer demand for cloud services. Cloud services and license support costs alone rose 23 per cent during the quarter, while total operating expenses were up eight per cent at $6.69 billion.

Oracle Chief Executive Officer Safra Catz said earnings were hit by "share price declines of equity investments, impacted by the widespread downturn in equity markets last quarter."

Revenue was at $10.51 billion, in line with estimates.

The company expects fourth-quarter adjusted profit to be between $1.40 and $1.44 per share, ahead of estimates of $1.38. It forecast revenue to grow between six to eight per cent on a constant currency basis.


Last modified on 11 March 2022
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