Oracle's 2Q results top Street expectations; software and cloud revenues up 5 percent

Oracle Corp. posted better-than-expected results Wednesday in its first quarterly report since co-founder Larry Ellison gave up the helm of the business software maker.

The company reported net income of $2.5 billion, or 56 cents a share, in its fiscal second quarter that ended Nov. 30. That was down slightly from $2.55 billion, or 56 cents a share, a year ago.

Its earnings, adjusted for amortization costs and stock option expense, were 69 cents per share. The average estimate of analysts surveyed by Zacks Investment Research was for adjusted earnings of 68 cents per share.

The company based in Redwood City, California, posted revenue of $9.6 billion in the period, also topping Street forecasts. Analysts expected $9.51 billion, according to Zacks. A year ago, it posted revenue of $9.28 billion.

Oracle announced in September that Ellison was stepping aside as CEO after 37 years, while retaining the title of executive chairman. His two top lieutenants, Safra Catz and Mark Hurd, are now co-CEOs.

The changing of the guard came as Oracle is dealing an industry shift that has led more of its corporate customers to lease software applications stored in remote data centers instead of paying licensing fees to install programs on machines kept in their own offices. The move to what is known as cloud computing is being led by smaller companies that were set up to focus on leasing software over the Internet.

Oracle, however, reported that its software and cloud revenue grew 5 percent to $7.3 billion in the latest quarter.

Its shares were up $2.21, or 5.4 percent, to $43.37 in extended trading after the release of the earnings report.

Through the close of regular-session trading Wednesday, Oracle's shares had risen roughly 8 percent since the beginning of the year, while the Standard & Poor's 500 index has climbed almost 9 percent.

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Elements of this story were generated by Automated Insights using data from Zacks Investment Research. ORCL stock research report from Zacks.

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Keywords:Oracle,Earnings Report