Oracle Corporation (ORCL) Shares Trade Up Today in Anticipation of Earnings Call

Business software maker Oracle Corp on Wednesday delivered a third-quarter profit forecast that did not quite meet analysts’ expectations, and the company’s shares fell about 1 percent in extended trading.

Oracle today said it expects SaaS and PaaS revenue to grow almost 50 percent in Q3 and close to 60 percent in Q4 against 38 percent in Q2. However, Oracle’s cloud boost was tempered by a 16 percent decrease in its on-premise hardware revenues, which totaled just $1.12 billion for the quarter.

For the period ended November 30, Oracle reported a profit of $2.2 billion, or 51 cents a share, down from $2.5 billion, or 56 cents a share, a year earlier.

Revenue from the sale of Oracle’s traditional on-premise software was $6.4 billion, down 7 percent and flat after backing out currency effects. Total Services Revenues were $861 million, down 8% in US dollars and unchanged in constant currency.

In other Oracle news, Director George H. Conrades sold 45,000 shares of the company’s stock in a transaction on Friday, October 30th.

Net income of $2.19bn was down 12 per cent year-over-year from $2.5bn.

So it’s not surprising with this quarterly earnings, Oracle is emphasizing the number of customers it signed up for cloud computing, in particular the higher-margin software subscription business (known as Software-as-a-Service or SaaS) and the higher-margin app development/hosting business (known as Platform-as-a-Service or PaaS). (The company follows June to May fiscal year.) Cloud revenue growth is expected to pick up sequentially as the company’s substantial deferred revenues begin to kick in. This represents a $0.60 dividend on an annualized basis and a yield of 1.54%. This dividend will be paid to stockholders of record as of the close of business on January 6, 2016, with a payment date of January 27, 2016. You can catch a webcast of the call on the company’s investor relations Web site.

The stock is up 1.88% or $0.72 following the news, hitting $38.93 per share.

Oracle Corporation (NASDAQ:ORCL) is a provider of enterprise software and computer hardware products, and services.

In September, Safra Catz, Oracle’s co-chief executive, said she expected foreign-exchange rates to hurt revenue by 6% and per-share earnings by 5 cents but conceded that it could be worse. The company licenses its Oracle Database software to customers, which is created to enable reliable and secure storage, retrieval, and manipulation of various forms of data; and Oracle Fusion Middleware software to build, deploy, secure, access, and integrate business applications, as well as automate their business processes. James was most recently president of Intel Corp. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link.

To supplement our financial results presented on a GAAP basis, we use the non-GAAP measures indicated in the tables, which exclude certain business combination accounting entries and expenses related to acquisitions, as well as other significant expenses including stock-based compensation, that we believe are helpful in understanding our past financial performance and our future results.