Why Is Oracle Stock Trading Lower Tuesday?

Oracle Corp ORCL stock is trading lower Tuesday following its mixed second-quarter results.

The company's Q2 revenue of $12.94 billion fell short of the analyst consensus estimate of $13.05 billion, a 5.43% increase over sales of $12.28 billion in the same period last year.

It reported quarterly adjusted earnings of $1.34 per share, topping the Street's estimate of $1.32, a 10.74% increase over earnings of $1.21 per share from last year.

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Oracle posted a Cloud revenue (IaaS plus SaaS) increase of 25% Y/Y to $4.8 billion. The Cloud Infrastructure revenue (IaaS) was up 52% Y/Y to $1.6 billion, and Cloud Application revenue (SaaS) rose 15% Y/Y to $3.2 billion. 

The Fusion Cloud ERP revenue (SaaS) climbed 21% Y/Y to $0.8 billion. The NetSuite Cloud ERP revenue (SaaS) grew by 21% Y/Y to $0.8 billion.

Over the last twelve months, operating cash flow was $17 billion, and free cash flow was $10.1 billion.

The adjusted operating margin was 43% versus 41% Y/Y. The board of directors declared a quarterly cash dividend of $0.40 per share of outstanding common stock.

Piper Sandler analyst Brent Bracelin maintained Oracle with an Overweight and lowered the price target from $130 to $125.

UBS analyst Karl Keirstead reiterated Oracle with a Buy and lowered the price target from $135 to $125.

The stock has gained 38% year-to-date.

Price Action: ORCL shares traded lower by 9.50% at $104.20 premarket on the last check Tuesday.