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Software giant Oracle reported better than expected fiscal fourth quarter earnings after the close Wednesday. $ORCL benefited from Fusion and NetSuite cloud applications sales with competition on two main fronts, $AMZN Cloud infrastructure and $CRM platform database.

Oracle Netsuite

Oracle Corporation NYSE: ORCL Reported Earnings After Close Wednesday

$1.16 Beat $1.07 EPS Forecast And $11.14 Beat $10.93 billion forecast in revenue.

Earnings 

Oracle (ORCL) reported fourth quarter earnings of $1.16 per share, with adjusted net income up 23% from the comparable period of 2018 and above Wall Street’s forecasts of $1.07 per share. Up from May quarter from $3.28 billion or $0.79 per share a year earlier. Revenue was $11.14 billion vs. $10.93 billion as expected by analysts, according to Refinitiv.

Oracle’s sales remain under pressure even as the company continues its transition from conventional computing to the cloud space. The shift in business model keeps posing challenges, in terms of revenue performance.

Oracle Corporation NYSE: ORCL

Market Reaction After hours $55.07 +2.39 (+4.54%)

++Traded up to 55.80 after the release above the previous 52-wk high 55.53

Highlights

“Our high-margin Fusion and NetSuite cloud applications businesses are growing rapidly, while we downsize our low-margin legacy hardware business. The net result of this shift away from commodity hardware to cloud applications was a Q4 non-GAAP operating margin of 47%, the highest we’ve seen in five years,” said CEO Safra Catz.

  • Oracle's largest segment Cloud Services and License Support revenues were flat year-over-year at $6.8 billion, but above the $6.76 billion consensus estimate among analysts polled by FactSet
  • Cloud License and On-Premise License revenues rose 12% to $2.52 billion, over the $2.32 billion FactSet consensus estimate.
  • The top-line benefited from the strong performance by the Fusion and NetSuite cloud applications.

Oracle Q4 2019 Earnings

Outlook

Oracle CEO Safra Catz said on a Wednesday conference call that the company expects 80 cents to 82 cents in earnings per share, excluding certain items, and flat to 2 percent growth in revenue for the first quarter of the 2020 fiscal year. Analysts polled by Refinitiv had been looking for 80 cents per share, excluding certain items, on $9.36 billion in revenue, which would reflect 1.7% revenue growth.

For the full 2020 fiscal year, Catz said Oracle is aiming for double-digit growth in earnings per share and revenue growth that’s faster than last year in constant currency. Analysts surveyed by Refinitiv were expecting full-year guidance of $3.79 in earnings per share, excluding certain items, which would imply growth of 9.9%, on $40.17 billion in revenue, which would be up 2.2%,  a growth rate that would exceed the roughly flat revenue in the 2019 fiscal year.

Source: Oracle, Alpha Street

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