Oracle faces backlash after missing revenue and EPS targets
- Oracle Corporation reported second-quarter financial results with revenues of $14.06 billion, falling short of estimates.
- In after-hours trading, Oracle's stock faced significant volatility, dropping by 6.3%.
- Despite the earnings miss, Oracle projected impressive future growth in its cloud segment driven by AI.
In December 2021, Oracle Corporation announced its second-quarter financial results, revealing a total revenue of $14.06 billion, which was below analysts' expectations of $14.11 billion. The adjusted earnings per share stood at $1.47, missing the consensus of $1.48. This disappointment triggered significant volatility in Oracle's stock during after-hours trading. Despite the revenue miss, Oracle highlighted strong growth in its cloud segment, particularly an impressive 52% increase in cloud infrastructure revenue driven by artificial intelligence demand. CEO Safra Catz also noted that GPU consumption surged by 336% during this period. Larry Ellison, Oracle's Chairman and CTO, stated that the company's AI capabilities positioned it advantages over competitors. Looking ahead, Oracle announced remaining performance obligations of $97 billion and expected total cloud revenue for the fiscal year to exceed $25 billion, indicating continued growth potential despite the current setbacks. Investors were left assessing the impact of the earnings miss on Oracle's long-term prospects as shares fell by 6.3% in after-hours trading, although prior to this announcement, they had seen an impressive 82% increase year-to-date.