Oracle $ORCL Slides 6.5% on Weak Guidance After Earnings

Software giant Oracle reported better than expected first quarter earnings but weak forward guidance has seen the stock $ORCL crushed 6.4% on Friday. This was despite an upbeat picture on it’s cloud segment.

Oracle CloudSoftware giant Oracle reported better than expected earnings but weak forward guidance  has seen the stock $ORCL crushed 6.4% on Friday. This was despite an upbeat picture on it’s cloud segment. NetSuite business, which $ORCL acquired last year was one of the big contributors to growth but Oracle’s on-premises database software business was a continued drag on the company.

Earnings: $0.62 per share vs. 60 cents in earnings per share as expected by analysts, according to Thomson Reuters on a 7.0% year-over-year increase in revenue to $9.21 billion. $9.02 billion was expected by analysts, according to Thomson Reuters.

Reaction: Oracle Corporation NYSE: $ORCL – Sep 15, 9:33 AM49.34 –3.44 (-6.53%)

Cloud Software

  • Cloud Software Service revenue grew 62.0% to $1.10 billion
  • Cloud Platform Service plus infrastructure revenue grew 28.0% to $400 million. (Amazon’s $AMZN is the market leading cloud infrastructure service with $4.1 billion in revenue in Q217.)
  • $ORCL now has 5,000 Fusion ERP customers and 12,000 NetSuite ERP customers in the Oracle cloud.

Oracle’s CEO said the Cloud Software as a Service growth rate outpaced that of Salesforce.com $CRM 95.30.  Oracle will present its first fully autonomous database cloud service in upcoming weeks.

In the cloud infrastructure market, Oracle falls behind it’s competitors Amazon, Microsoft and Alphabet. Oracle competitors in cloud software include Microsoft, Salesforce, SAP and Workday.

Cloud infrastructure and platform revenue came in at $400 million. For the sake of comparison, 

Segment Breakdown

  • Americas software revenue grew 9.8% to $3.88 billion while hardware revenue decreased 7.8% to $526 million.
  • Europe, Middle East, and Africa software revenue increased 6.1% to $2.02 billion while hardware revenue declined 1.5% to $271 million.
  • Asia Pacific software revenue climbed 9.6% to $1.11 billion while hardware revenue declined 4.1% to $195 million.

Software revenue increased 9.0% to $7.40 billion.

Guidance: Second quarter guidance Oracle expects second quarter earnings between $0.64 and $0.68 per share on revenue between $9.215 billion and $9.396 billion.

Live From The Pit

Leave a Reply

Your email address will not be published.