The strength in the cloud ERP business is also likely to boost the quarterly results. Last quarter, the cloud ERP businesses, including Fusion ERP and NetSuite ERP, grew 33%. Oracle continues to improve its cloud-based services as it faces tough competition from Amazon (NYSE: AMZN) and Alphabet’s (NYSE: GOOG) Google. However, higher costs are likely to pressurize margins in the second quarter.
Also read: Oracle Q1 2020 Earnings Conference Call Transcript
In the first quarter, the company reported adjusted earnings
of $0.81 per share that was up 14% year-over-year and in line with analysts’
forecasts. Revenue amounted to $9.2 billion which was below estimates.
For the second quarter, Oracle has guided for revenue growth of 0-2% in US dollars and 1-3% in constant currency. Adjusted EPS is expected to grow between 9-11% to a range of $0.87-0.89 in US dollars, and between 10-12% to a range of $0.88-0.90 in constant currency. Shares of Oracle have gained over 23% so far this year and 2% in the past three months. The stock has an average 12-month price target of $56.92.