Top NewsOracle announces Q2 results: revenue up 5%, adjusted EPS $1.34 versus $1.21, beating earnings… CEO Safra Catz said the former Cerner business, acquired for $28 billion in June 2022, produced “a drag on Oracle growth.From the earnings call:Total revenue for the quarter grew 4%, but would have increased 6% excluding the contribution of the former Cerner.Catz once again mentioned the imperative to “drive Cerner profitability to Oracle standards.” She says that Cerner’s impact on Oracle’s growth will be “sort of negative one to two points” this fiscal year, then it will end.
Chairman and CTO Larry Ellison says that half of Cerner Millennium customers will move to Oracle Cloud Infrastructure by February. The earnings report is not good news for whatever is left of Cerner.” I said a week ago that it would get ugly if ORCL shares reacted negatively to financial news that could be attributed in any way to the former Cerner business. The CEO’s reaction to Tuesday’s revenue miss was even more direct than I would have expected, where she threw Cerner under the bus for being an underperforming drag on company revenue. Given Wall Street’s quarter-by-quarter fixation and Oracle’s competitive AI and cloud battles with powerhouse tech companies, the obvious answer would seem to be cutting Cerner costs even more, and about the only ways that companies can do that is to reduce headcount, sell real estate, discontinue or sell lower-margin business, and reduce R&D.
