A great quarter for Oracle

Oracle (ORCL) continues to benefit from growth in cloud services. Oracle's Q2 FY2022 revenue and earnings report was above market analysts' estimates for Q3. 2022 and Oracle's outlook for Q3 was above market analysts' estimates.

Shares in Oracle (ORCL), up 37.2% since the start of 2021, rose 10.4% in the postmarket on Thursday on the back of a successful financial report. By comparison, the S&P 500 index is up about 24.26% YTD.

The better-than-expected results and Oracle's strong growth outlook could be the reasons for the stock's recovery, given that Oracle shares lost 6.15% in the last month.

In addition, analysts at Credit Suisse and Deutsche Bank gave Oracle stock a target price of $110 last month, a 23.8% upside forecast from current levels. Oracle's share price was $88.77 at the close of trading on Thursday. At the same time, analysts at Credit Suisse gave Oracle stock an "Outperform" rating.

Oracle report

Oracle's earnings per share for the second quarter of fiscal 2022 (ended Nov. 2022 (ended Nov. 30) rose 14% to $1.21, beating market analysts' forecast of $1.11.

Total quarterly earnings rose 6% to $10.4bn, beating Wall Street's average analyst forecast of $10.21bn.

Oracle's cloud services and license support revenues rose 6% to $7.55 billion, slightly above analysts' forecast of $7.54 billion. Cloud and on-premises license revenue was $1.24 billion, up 13% from analyst estimates of $1.07 billion.

Oracle's management called the past reporting quarter "fantastic" as financial results exceeded expectations despite losing $100 million in revenue and -$0.01 in earnings per share due to unfavorable currency movements.

Oracle also said it lost $0.46 per share due to legal expenses in a 10-year old case involving the hiring of Mark Hurd as CEO of the company. Oracle forecasts

The company expects further acceleration in revenue growth in the current 2022 fiscal year compared to FY2021 levels. Oracle's earnings per share forecast for the third fiscal quarter is $1.14 to $1.18, compared to analysts' estimates of $1.16.

The company's revenue growth forecast of 3% to 5% for the current quarter is more conservative compared to Wall Street's forecast of 5% or $10.56 billion.

Oracle announced this quarter that it will open cloud data centres in Colombia, France, Israel, Italy, Mexico, Singapore, South Africa and Sweden.