Oracle Corporation (NYSE: ORCL) stock is managing to trade in green and rose over 0.2% on 18th December, 2018 (as of 10:55 am GMT-5; Source: Google finance) after the company posted better than expected results second quarter of FY 19 as the software giant made progress in a piece of its struggling cloud business. Oracle changed how it reports its quarterly financial results this year, mixing its cloud-computing business, which had been growing more slowly than that of competitors, with its licensing-support business. The change makes it harder to track the performance of the cloud business. Overall, Oracle reported second-quarter profit rose 5% to $2.33 billion. The company has a contract backlog of $30.1 billion, of which approximately 62% will be recognized as revenue over the next 12 months.
Operating cash flow over the last four quarters was $15.2 billion. Q2 operating cash flow was in fact negatively impacted by the first installment payment over $600 million on the one time transition tax related to the U.S. Tax Cuts and Jobs Act of 2017.
ORCL in the second quarter of FY 19 has reported the adjusted earnings per share of 80 cents, beating the analysts’ estimates for the adjusted earnings per share of 78 cents. The company had reported the adjusted revenue growth of 2 percent to $9.57 billion in the second quarter of FY 19, beating the analysts’ estimates for revenue of $9.53 billion. Revenue in Oracle’s largest segment, which is its cloud services and license support, rose to a stronger-than-projected $6.64 billion in the quarter ended Nov. 30. The gross margins for cloud services and license support was 86%, essentially the same as last year with continuing improvement in SaaS gross margins, stability in software support gross margins and continued investments in Oracle cloud infrastructure. Non-GAAP operating income was $4.1 billion unchanged from last year and the operating margin was 43%, the same as last year. The non-GAAP tax rate for the quarter was 18.6%, slightly below the base rate of 20%. The short term deferred revenue balance is $8.2 billion and that’s up 6% in constant currency.
This quarter, the company has repurchased $203 million shares for a total of $10 billion. Over the last 12 months, the company have repurchased 602 million shares and reduced the absolute shares outstanding by over 12%. The Board of Directors has again declared a quarterly dividend of $0.19 per share.
For Q3 2019, the total revenues are expected to grow 2% to 4% in constant currency