What to Expect From Oracle Earnings

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Oracle Corp. (NYSE: ORCL) is scheduled to release its fiscal first-quarter financial results after the markets close on Thursday. The consensus estimates from Thomson Reuters call for $0.60 in earnings per share (EPS) and $9.03 billion in revenue. The same period of last year reportedly had $0.55 in EPS and revenue of $8.61 billion.

Following the previous quarterly report, Merrill Lynch took a very bullish stance on Oracle, at the time saying that its business is poised for an inflection point to potentially deliver mid-single-digit software revenue growth and operating income going forward. This was more or less validated by a stronger than expected May quarter on multiple fronts.

Ultimately, Merrill Lynch has a Buy rating and one of the higher targets on the street at $62. Since the company reported last, the stock is actually up about 14%.

The brokerage firm went on to say:

A key issue had been a plethora of reported metrics from legacy/cloud businesses which carried inherent risks of not being able to satisfy all constituents. Our belief that simplification into distinct businesses would be a positive — Apps and Platform – was validated by Oracle’s decision to re-segment. We believe Oracle, by transitioning its ~15K ERP customers @ 2-3 Cloud modules @$300K annual contract value + current run-rate of $4bn and assuming 50% conversion of its pipeline of 8K customers could potentially drive towards a $15bn SaaS revenue stream. As a result of GM/OM improvement, ORCL is poised to grow pfEPS/FCF high single digits in F18, reversing 3 years of declines.

A few other analysts recently weighed in on Oracle:

  • Drexel Hamilton has a Buy rating with a $62 price target.
  • RBC has an Outperform rating with a $56 price target.
  • Rosenblatt has a Buy rating with a $58 price target.
  • Credit Suisse has an Outperform rating with a $62 price target.
  • Stifel has a Buy rating with a $52 price target.
  • Jefferies has a Buy rating with a $60 price target.
  • KeyCorp has a Buy rating with a $61 price target.

So far in 2017, Oracle has outperformed the U.S. broad markets, with the stock up 37%. Over the past 52 weeks, the stock is up only about 31%.

Shares of Oracle were last seen trading at $52.80, with a consensus analyst price target of $55.03 and a 52-week range of $37.62 to $53.14.