Following the company’s Q3 earnings release, which showed higher EPS but marginally lower revenues than anticipated, Oracle (NYSE:ORCL) shares are down more than 4% in pre-market trading on Friday. The actual EPS was $1.22, exceeding the average forecast of $1.21. In contrast to the average projection of $12.43 billion, revenue increased 18% yearly (up 21% in constant currency).

Revenues from cloud services and licence support increased 17% to $8.9B, while revenues from cloud licences and on-premise licences reached $1.3B. (flat year-over-year). In Q3, Cerner contributed $1.5B to overall sales.

“Oracle’s cloud businesses now generate annualised sales of more than $16 billion. With almost 10,000 Fusion ERP clients and more than 34,000 NetSuite ERP customers, we continue to dominate the Cloud ERP market. According to Oracle CEO Safra Catz, our technologically cutting-edge and highly distinctive Gen2 infrastructure business, which grew by 65% in Q3 in constant currency, is still in a hypergrowth phase.

Also, the company increased its dividend by 25%, to $0.40 per share, which will be paid to stockholders of record as of the close of business on April 11, 2023, with a payment date of April 24, 2023.

Oracle anticipates FY sales between $13.61 billion and $13.85 billion, exceeding the consensus estimate of $13.66 billion. The estimated adjusted EPS is $1.56-1.60, once higher than the $1.45 consensus.

Mizuho analysts took note of a strong cloud momentum and impressive guidance.

The analysts noted, “We believe investors may be underestimating Oracle’s potential over the medium term to achieve robust top-line and cash flow growth and exceed its FY26 forecasts.

Guggenheim analysts said Oracle’s report was “impressive” given the current macro environment.

“We’d be aggressive buyers, as we believe Oracle is a distinct kind of unicorn in that it’s not immune to the economy (no one is), but it does have something that should at least somewhat balance it,” they observed.