Oracle’s shares jumped more than 5 per cent in after-market trading on Wednesday after the US business software company said it was on the verge of showing profit from its move into cloud computing.
Safra Catz, co-chief executive, said Oracle’s revenues from its cloud business would top software licences in the fiscal year that starts in June, in a symbolic turning point for the second-biggest US software company. She also claimed the profitability and cash flow of the cloud would be every bit as attractive as Oracle’s traditional business, in the latest attempt to dispel Wall Street’s fears that lower margins and greater competition will make it less profitable.
Wall Street has been warming to the idea that growth in Oracle’s cloud business will soon offset profit declines in its traditional on-premise software licensing business. The company’s shares were up 12 per cent since the start of the year, nearly double the broader market.
Ms Catz’s comments came as the company reported earnings for the third fiscal quarter. They included a reassertion of the group’s forecast that its earnings per share will return to growth of at least 10 per cent next year, on a pro forma basis.
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