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oracle profit: Oracle revenue, profit top estimates on cloud boom

Oracle Corp topped Wall Street estimates for quarterly profit and revenue on Monday, as demand for its cloud products soars amid an industry-wide shift to cloud-based platforms.

Shares in the Austin, Texas-based company, whose fourth-quarter revenue jumped 5%, rose about 12% in extended trade.

“We believe that this revenue growth spike indicates that our infrastructure business has now entered a hyper-growth phase,” Oracle Chief Executive Officer Safra Catz said in a statement.

Oracle, which reported a currency headwind of 5% in the fourth quarter, up from 2% to 3% in the third quarter, said it expects substantial revenue growth in its cloud business, despite rising inflation and a stronger greenback.

Microsoft in April and Salesforce Inc last month also indicated a strong future for the cloud market as companies increase spending, though the former cut its fourth-quarter forecast for profit and revenue earlier this month due to unfavorable exchange rates.

Oracle warned of a $100 million hit per quarter in fiscal year 2023 as a result of suspending services in Russia.

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The company, however, expects first-quarter revenue growth between 17% and 18%, boosted by its $28-billion acquisition of healthcare IT company Cerner Corp.

Oracle’s forecast comes on a day U.S. equity markets tumbled with the S&P 500 confirming it was in a bear market as investors fear aggressive interest rate hikes by the Federal Reserve could plunge the economy into recession.

The company expects first-quarter adjusted EPS between $1.04 and $1.08 compared with analysts’ average estimate of $1.13.

Revenue for the fourth quarter ended May 31 grew to $11.84 billion, above analysts’ average estimate of $11.66 billion, according to IBES data from Refinitiv.

Excluding items, the company earned $1.54 per share, beating estimates of $1.37 per share.

(Reporting by Akash Sriram and Chavi Mehta in Bengaluru; Editing by Vinay Dwivedi)

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