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Oracle sinks on Wall Street

by on16 June 2021

Profits cloudy

Oracle disappointed the expectation of the cocaine nose jobs of Wall Street by forecasting current quarter profit below Wall Street estimates.

The company is chucking money at investments in its cloud computing business to take on rivals including Microsoft and

The company said it will double its capital spending on the cloud segment to $4 billion in fiscal 2022 as it benefits from the pandemic with businesses opting for hybrid-work models.

Increased investment in cloud, however, led Oracle to forecast first-quarter earnings per share of 94 cents to 98 cents, below expectations of $1.03, sending its shares down 4.5 percent in extended trading.

The company has been setting up more data centres to assist businesses as they expand operations, helping it beef up cloud offerings and win high-profile customers such as Zoom.

Investors and analysts though still see the 45-year-old company as a niche player when compared to giants such as Alphabet, Google, Microsoft and Amazon.

"One of Oracle's biggest issues is how small the company's revenue growth has been, despite a focus on its cloud solutions."

Oracle said it expects current-quarter revenue at its largest unit, cloud services and license support, to grow by four percent, which comes to about $7.2 billion, according to Reuters' calculations. Analysts on average expect it to be $7.36 billion.

The company posted an adjusted profit of $1.54 per share on revenue of $11.23 billion in the fourth quarter ended May 31, compared with estimates of a profit of $1.31 and revenue of $11.04 billion.

Last modified on 16 June 2021
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