Oracle forecasts upbeat third quarter as IT spending rebounds
The company's shares rose about 10.4% at $98 in extended trading
Enterprise software maker Oracle Corp forecast current-quarter profit and revenue above market estimates on Thursday after posting upbeat results for the second quarter, helped by higher tech spending from businesses looking to support hybrid work.
As the pandemic pushed more companies to shift to a hybrid work model, spending on cloud technology has risen, benefiting Oracle and other firms such as Salesforce, Amazon.com Inc and Microsoft.
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The company's shares rose about 10.4% at $98 in extended trading.
Revenue at Oracle's cloud services and license support unit, its largest, rose to $7.55 billion in the second quarter from $7.11 billion a year earlier. This is expected to grow between 6% and 8% in the third quarter, the company said.
Oracle has been ramping up investments in data centers worldwide, especially in government-focused ones, CEO Safra Catz said on a conference call with analysts.
About 75% of Oracle's Enterprise Resource Planning (ERP) customers have not transitioned to the cloud, and the company has a very good chance of shifting them over and boosting its ERP revenues, said Scott Kessler, an analyst at Third Bridge.
The company expects current-quarter profit between $1.19 per share and $1.23 per share, higher than Refinitiv IBES estimates of $1.16 per share. It expects revenue of $10.7 billion to $10.9 billion, according to Reuters calculations, above estimates of $10.56 billion.
Oracle said it made a payment for a judgment related to a dispute regarding former CEO Mark Hurd's employment, that resulted in a third-quarter loss of $1.25 billion versus a profit of $2.44 billion a year earlier.
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On an adjusted basis, the company earned $1.21 per share on revenue of $10.36 billion. Analysts had expected profit of $1.11 per share and revenue of $10.21 billion, according to Refinitiv IBES data.
(Reporting by Akash Sriram in Bengaluru; Editing by Shounak Dasgupta and Ramakrishnan M.)