Oracle (ORCL +0.70%) stock is sinking in Tuesday's trading following the company's recent quarterly report. The tech giant's share price was down 6.8% as of 10:45 a.m. ET.
NYSE: ORCL
Key Data Points
After the market closed yesterday, Oracle published results for the second quarter of its current fiscal year, which ended Nov. 30. The company posted sales and earnings for the period that fell short of Wall Street's targets, and its forward guidance also missed the mark.
Oracle's Q2 results come up a bit short
Oracle reported non-GAAP (generally accepted accounting principles) adjusted earnings per share of $1.47 on sales of $14.1 billion. Meanwhile, the average analyst estimate had called for the business to deliver adjusted earnings of $1.48 per share on revenue of $14.1 billion. The company closed out the quarter with remaining performance obligations of $97 billion, representing a 49% annual increase.
Sales were up 9% year over year in the period, with strong performance for the company's cloud segment helping to drive growth. Overall segment sales were up 24% year over year to $5.9 billion. Within the category, cloud infrastructure revenue increased 52% year over year to $2.4 billion. Meanwhile, cloud application revenue was up 10% year over year to $3.5 billion.
What comes next for Oracle?
For the current quarter, Oracle is guiding for adjusted earnings per share (EPS) between $1.50 and $1.54. For comparison, the average analyst estimate had called for adjusted EPS of $1.57 in the period. Meanwhile, revenue is projected to grow between 7% and 9% -- or between 9% and 11% on a currency-adjusted basis.
While the company's fiscal Q2 results and Q3 earnings guidance fell short of the average Wall Street target, Oracle's cloud businesses continued to show some encouraging momentum. For investors who see promise in the company's fast-growing cloud infrastructure business, today's pullback could present a worthwhile buying opportunity.
