Focus Stock: Oracle Corporation (NYSE: ORCL)

Oracle Corporation (NYSE: ORCL) has reported the non-GAAP earnings per share of $0.61 in the second quarter of FY 17, beating the analysts’ expectation of 60 cents. ORCL’s non-GAAP revenues grew 1% to $9.1 billion year over year in Q2 FY 17 missing the analysts’ expectation of $9.11 billion.

Oracle Corporate Headquarters

REDWOOD CITY CA/USA – MAY 31 2014: Oracle corporate headquarters in Silicon Valley. Oracle is a computer technology corporation specializing in database management systems.

Meanwhile, the non-GAAP SaaS and PaaS revenues grew 89% to $912 million and the total cloud revenues, including infrastructure as a service (IaaS) grew 64% to $1.1 billion. For four consecutive quarters the Cloud SaaS & PaaS revenue growth rate has increased due to the quarterly cloud revenue growth. This the first quarter when the cloud revenue has crossed over one billion dollar mark. On the other hand, as per the latest IDC report, ORCL has now crossed salesforce.com and has now become number one in SaaS cloud applications sales to customers having more than 1,000 employees. ORCL is now expecting to book over $2 billion in new annually recurring cloud business in FY 17 alone. In addition, with the acquisition of NetSuite, ORCL has planned to be number one in cloud applications service provider for companies. Moreover, the Cloud plus On-Premise Software revenues grew 3% to $7.2 billion. The short-term deferred revenues grew 8% to $7.4 billion in Q2 FY17.

Additionally, ORCL’s Database as a Service cloud revenue has grown $100 million for the second quarter of FY 17, driving growth in the overall database business. ORCL expects that the Database as a Service and IaaS businesses will grow faster than the SaaS business also.

Non-GAAP operating income in the second quarter of FY 17 is $3.8 billion and non-GAAP operating margin is of 42% in Q2 FY17. Therefore the Net Income is $2.6 billion in Q2 FY 17. Moreover, ORCL has declared a quarterly cash dividend of $0.15 per share payable on January 26th, 2017.

Oracle’s chief executive Safra Catz will join President-elect Donald Trump’s transition team.

ORCL stock has risen 4.3% in the last four weeks (as of December 16th, 2016; Source: Google Finance). Brokerage firms, analysts from Wedbush and       Oppenheimer reiterated their “Hold” recommendation while Cowen & Co and Canaccord Genuity reiterated “Buy” recommendation on Oracle. According to tipranks.com, 18 analysts has covered the stock while recommend a “Moderate Buy”. ORCL has an average price target of $45.87, which is a further upside of 12.26%.

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