Oracle Corp. (NYSE: ORCL) rose over 1.78% in pre trading session on Tuesday as company releases quarterly sales that above analysts’ expectations, thanks to a strong effort from its Cerner digital health records subsidiary, which helped the company overcome reduced demand for information technology services in a turbulent economy.
According to Bloomberg statistics, sales grew 18% to $12.3 billion in the fiscal quarter ended Nov. 30, compared to analysts’ average forecast of $12 billion. Profit, excluding certain expenses, was $1.21 per share, including a 9-cent impact from currency movements. Analysts predicted $1.18 per share on average.
Cloud revenue, a closely watched category that Oracle has been attempting to boost, increased 43% to $3.8 billion in the fiscal second quarter, according to a statement issued Monday by the Austin, Texas-based business. In the previous quarter, the segment grew by 45% year on year.
The database technology company provides enterprise software programs that may be accessed through the internet. The company has also been working to expand its business of renting processing power and storage, which is a market driven by Amazon.com Inc. and Microsoft Corp. Oracle forecasted a higher-than-expected $65 billion in annual revenue by the 2026 fiscal year during an analyst day in October.
According to Chief Executive Officer Safra Catz on a conference call following the results, the business spent $2.4 billion on capital expenditures in the quarter, mostly on data centers needed to fulfill cloud demand. Catz stated that she plans to invest at such level for the “next few quarters.”
Oracle, Amazon Web Services, Microsoft, and Alphabet Inc.’s Google each received a portion of a $9 billion Department of Defense deal for cloud services last week.
Oracle is also banking on its June acquisition of Cerner to make inroads into health care, an area that has been sluggish to adopt web-based data technologies. Oracle said that Cerner made $1.5 billion in revenue during the quarter.
According to Chairman Larry Ellison, Cerner has contributed to Oracle’s growth and Oracle has assisted Cerner in improving its technology since the purchase. They are, however, only at the start of their endeavor to upgrade health-care information systems.
Anurag Rana, a senior analyst at Bloomberg Intelligence, predicted in a note before the data were released that the digital medical records section “may more than outweigh any economic-related shortfall.”
Sales of the Fusion program for managing corporate finances increased 23% during the quarter, compared to 33% the previous quarter. Revenue from NetSuite’s enterprise planning capabilities for small and medium organizations climbed by 25%, compared to 27% the previous quarter.