By Vibhuti Sharma
(Reuters) - Oracle Corp
Shares rose 5 percent, with the company saying that excluding fluctuations in exchange rates, it expected third-quarter adjusted profit to be between 86 cents and 88 cents per share.
Analysts on average were expecting 84 cents, according to IBES data from Refinitiv.
Revenue at its cloud services and licence support unit, its biggest, rose 2.7 percent to $6.64 billion and beat analysts' estimate, as more companies shifted to cloud computing from the traditional on-premise database model to cut costs.
Oracle's in June created a new revenue reporting structure that merged its cloud and software licence businesses, which analysts have said gives little insight into the standalone performance of its cloud unit.
Oracle is a late entrant to the rapidly growing cloud-based software business, but has aggressively stepped up its efforts to catch up with rivals such as Workday Inc
"Oracle's growth in cloud services and licence support of just 3 percent appears to be contradicting the strength in the overall cloud market," said Daniel Morgan, senior portfolio manager of Synovus Trust Co, which hold 152,500 shares in the company.
Last month, Workday reported a 35 percent jump in cloud subscription revenue, while Salesforce's flagship product Sales Cloud grew 11 percent.
"Oracle is still dragging behind other old line enterprise software players like Microsoft in its transition to becoming a top cloud company," said Morgan, whose firm also hold shares in Salesforce and Microsoft Corp
The company's net income rose to $2.33 billion, or 61 cents per share, in the second quarter ended Nov. 30. Excluding items, the company earned 80 cents per share, beating the average analyst estimate of 78 cents.
Total revenue fell marginally to $9.56 billion, but brushed past analyst expectation of $9.52 billion.
Shares of the company were up at $48 in after-market trading.
(Reporting by Vibhuti Sharma in Bengaluru; Editing by Arun Koyyur)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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Updated Date: Dec 18, 2018 06:05:08 IST