What to Expect From Oracle Earnings

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Oracle Corp. (NYSE: ORCL) is set to report earnings after the close of trading on Thursday. The enterprise software giant is expected to report quarterly earnings of $0.95 per share on $11.48 billion in revenue. Also note that this is Oracle’s year-end report for fiscal May 2014, and the annualized estimates are $2.91 in earnings per share on $38.45 billion in revenue.

Update at 1:00 p.m. EST: WhisperNumber.com said in an email to us that the whisper number is $0.98, three cents ahead of the consensus estimate and showing strong confidence from investors. Whispers range from a low of $0.92 to a high of $1.10 (per share). They also said that Oracle has a 62% positive surprise history (having topped the whisper in 37 of the 60 earnings reports).

What has been amazing is the turnaround recovery seen of late. Shares just hit a new high of $43.19 on Thursday, ahead of the Oracle report. The company’s market cap is now worth $191 billion.

As far as valuations are concerned, Oracle trades at just under 15 times this year’s expected earnings. It is valued at only about 13.5 times expected earnings in 2015.

Where Oracle is weak is in its dividend, with a paltry 1.1% yield. Then there are the ongoing reports that the company may spend a sum of about $5 billion to acquire MICROS Systems Inc. (NASDAQ: MCRS) for approximately $5.0 billion. This would put MICROS fully valued if the price is right in the rumor because the market cap is already $4.9 billion.

Options traders are braced for a move of close to $1.00 in either direction.

Last quarter, the company signaled that sales of Oracle’s cloud applications had bookings growth of more than 60%, and that quarterly cloud application revenue was approaching $300 million. Its non-GAAP operating margin was 47% last quarter.

The good news is that Oracle is still far from expensive. The bad news is that Oracle is close to challenging all-time highs on top of just having hit decade highs. Many investors may be interested in taking profits in a company when they feel the growth likely will come from acquisitions.

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