San Francisco: Oracle Corp topped analysts’ estimates for quarterly sales, signalling that demand for the company’s cloud services is holding up in the face of an economic slowdown caused by the coronavirus outbreak.
The company also announced a $15 billion share buy-back programme. Shares jumped about 3 per cent in extended trading.
Revenue gained 1.9 per cent to $9.8 billion in the fiscal third quarter, which ended February 29, the Redwood City, California-based company said Thursday in a statement. Analysts, on average, expected $9.76 billion, according to data compiled by Bloomberg.
The world’s second-largest software maker, led by Chief Executive Officer Safra Catz, has sought to boost profit by cutting expenses, including firing employees in offices around the world over the last few years. The company has struggled to bring existing database customers to cloud-based offerings and better compete against big public-cloud purveyors including Amazon.com Inc.
Analysts at Jefferies LLC warned that enterprise software companies including Oracle could be most affected by a global economic slowdown brought about by the Covid-19 pandemic that began late last year. “No one is immune,” the analysts wrote Wednesday in a note to investors.
Investors are looking for signs that Oracle’s Autonomous Database product, which is driven by artificial intelligence, can meaningfully contribute to the company’s revenue, which has remained little changed for two years. Oracle’s cloud-based applications have been a bright spot, but so far haven’t been large enough to fuel total sales growth.
Profit, excluding some items, was 97 cents a share in the third quarter, Oracle said. Analysts estimated 96 cents.
Oracle shares closed at $39.80 in New York before the report, and have dropped 25 per cent in the past 12 months.