Shares of database giant Oracle Corp. ticked up slightly in after-hours trading today after it reported fiscal first quarter results that beat analysts’ expectations, but its earnings forecast for the coming quarter came in lighter than expected.

The company reported earnings before certain costs such as stock compensation of $1.21 cents per share, coming in ahead of Wall Street’s forecast of $1.17 in earnings. Revenue for the period rose 18%, to $12.28 billion. Analysts had been targeting sales of $11.96 billion.

Overall, Oracle reported net income for the quarter of $1.74 billion, compared with a net loss of $1.25 billion in the year-ago period. Last year’s loss was connected to a payment relating to a judgment over Mark Hurd, Oracle’s former co-chief executive officer, who passed away in 2019.

Looking ahead to the second quarter, Oracle CEO Safra Catz (pictured) told analysts the company is looking at earnings of $1.17 to $1.21 per share and revenue growth of 17% to 19%. Wall Street had earlier forecast earnings of $1.24 per share on revenue of $12.34 billion, which would imply growth of 17%.

One of the reasons for Oracle’s growing revenue is the healthcare company Cerner, which the database and business software giant acquired last June for $28 billion. According to Oracle’s statement, Cerner added just over $1.5 billion in revenue.

However, it’s not only Cerner that Oracle can be thankful for. Its cloud efforts are also paying off. Catz said first quarter revenue was $200 million above the company’s own guidance range, thanks to strength in cloud infrastructure and cloud-based applications.

“Fusion Cloud ERP grew 28% in constant currency, NetSuite Cloud ERP grew 29% in constant currency — each and every one of our strategic businesses delivered solid revenue growth in the quarter,” Catz said in a prepared statement.

In a conference call, the CEO said Oracle is still not done integrating Cerner with its businesses. “We’ve got quite a way to go,” she said. “And I think over the next couple of quarters you’ll see continued improvement as we’ve done some of our operational integration and simultaneously I think they continue to overperform for us.”

Oracle executives were pleased about Cerner, but the real bright spot was Oracle’s cloud infrastructure business, where revenue shot up 53% to $1 billion. Elsewhere, cloud revenue — which includes infrastructure-as-a-service and software-as-a-service sales — jumped 43%, to $3.8 billion, and cloud application revenue rose 40%, to $2.8 billion. Altogether, Oracle’s cloud services and license support segment delivered $8.6 billion in revenue, up 14% from a year earlier.

“The company’s shift toward ‘cloudifying’ its traditional software and services offerings is proceeding apace, and it appears to be enjoying rapid returns from the Cerner acquisition,” said Charles King of Pund-IT Inc. “We’ve seen cautionary guidance for 2023 similar to Oracle’s from other enterprise tech vendors which likely reflects conventional wisdom about the possibility of an upcoming global recession. Whether those concerns will become real next year, businesses generally benefit more economically from stodgy conservatism than giddy optimism.”

Holger Mueller of Constellation Research Inc. told SiliconANGLE that Oracle has shown it’s possible for strong cloud product offerings to generate growth even with economic headwinds. He added that it was a historic quarter for Oracle Cloud Infrastructure, as it broke the $1 billion revenue barrier for the first time.

“The joker for growth in future will be the revenue from Cerner, and Oracle will be under pressure to deliver on this,” Mueller added. “But it’s encouraging to see how committed Oracle is to its cloud, with its fifth consecutive quarter of increased capital spending, now exceeding $6 billion for the first time. On a regional basis, Oracle has its work cut out in EMEA and APAC, where revenue growth is heading backwards. Virtually all of its growth is coming from North America at this stage.”

Oracle listed a number of big cloud customer wins and go-lives during the quarter. It said Airbnb Inc. has opted to consolidate its finance, accounting and financial reporting on Oracle Fusion Cloud ERP, EPM and Procurement to improve automation and surface better business insights from a single data model.

Another new customer is GE Aerospace, which is modernizing its enterprise resource planning environment by moving to Oracle’s cloud. The migration includes shifting Oracle E-Business Suite workloads to Oracle Cloud Infrastructure’s FedRAMP High-authorized cloud, Oracle said.

Those new customers are just some of the reasons to think Oracle can continue growing its cloud business organically. In the quarter just gone, Oracle announced a new service called Alloy that enables its partners to run its cloud services in their own data centers. The company was also named as one of the winners of a multibillion-dollar cloud computing contract from the U.S. Defense Department, having previously filed a lawsuit to prevent Microsoft Corp. from exclusively landing an earlier version of that contract.

King said the DOD cloud contract is certainly good news for Oracle, but he said the impact of that deal will be less than meets the eye. “The contracts are described as ‘might be worth as much as $9 billion’ through 2028,” King pointed out. “If the total is split equally four ways, the annual payout will be minimal for a company driving $50 billion in annual revenue.”

Oracle’s stock rose 2% after-hours, adding to a similar gain that was made during the regular trading session. Prior to the after-hours move, Oracle’s stock was down 7% for the year. In contrast, the S&P 500 index has slipped 15% since the beginning of the year.

Photo: Oracle PR/Flickr