Oracle Corp (NYSE: ORCL) reported mixed fiscal 2023 third-quarter results. While earnings surpassed expectations, revenues missed estimates. The tech giant also lifted its quarterly dividend by 25%. The stock of Oracle ended Friday’s trading session at $84.07, down $2.80 or 3.22% from the prior close.
Redwood City, California-based company reported third-quarter revenues of $12.40 billion, up 18% from $10.51 billion in the same period last year.
For the quarter that ended February 28, 2023, Oracle posted a net income of $1.89 billion, or $0.68 per share, down from $2.32 billion, or $0.84 per share, in the quarter that ended February 28, 2022.
Stock-based compensation, amortization of intangible assets, acquisition-related, and other restructuring charges, among others, contributed to the Q3 2023 net income of $3.38 billion, or $1.22 per share, compared with $3.10 billion, or $1.13 per share, in Q3 2022.
The company clarified that devoid of the negative impact of the US dollar’s strengthening against other currencies, the Q3 non-GAAP earnings would have been higher by $0.05 per share.
Analysts surveyed by Refinitiv had anticipated the company to report earnings of $1.20 per share on revenues of $12.42 billion.
Commenting on the results, Oracle CEO, Safra Catz, stated, “Our strong quarterly earnings growth was driven by 48% constant currency growth for the total revenue of our two cloud businesses, infrastructure and applications.”
Segment wise:
- Cloud services and license support revenues rose by 17% y-o-y to $8.92 billion.
- Cloud license and on-premise license revenues were $1.29 billion, almost flat from the previous year.
- Hardware revenues were $811 million, an increase of 2% from last year.
- Services revenues surged 74% y-o-y to $1.37 billion.
Oracle reported a Q3 non-GAAP operating income of $5.20 billion, an increase of 8% on a y-o-y basis. The non-GAAP operating margin rose by 42%. While short-term deferred revenues were $8.60 billion, operating cash flow was $15.50 billion in the trailing twelve months.
The company’s Board has approved a quarterly cash dividend of $0.40 per share, representing a 25% increase over the prevailing quarterly dividend of $0.32. The quarterly dividend will be paid on April 24, 2023.
The mixed quarterly results are expected to keep the stock price of Oracle range-bound in the short term.
The historical price chart indicates that the share price of Oracle is declining after facing resistance at 90. The next major support is anticipated only near 78. Additionally, the stock is trading below its 50-day moving average, while the Chaikin Money Flow indicator is declining but showing a positive reading. Therefore, we anticipate the share price of Oracle to remain range-bound in the short term.
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