What to Expect From Oracle Earnings

Tuesday after the market closes, Oracle Corp. (NYSE: ORCL) plans to release its fiscal third-quarter earnings. Thomson Reuters has consensus estimates for $0.68 in earnings per share (EPS) on $9.47 billion in revenue. In the third quarter of the previous year, Oracle reported $0.68 in EPS on $9.32 billion in revenue.

This will be the second earnings report for which Larry Ellison will not be at the helm of Oracle as CEO. However, he is still on the company’s chief technology officer.

In the past quarter, the new co-CEO, Mark Hurd, noted that new cloud bookings grew at a rate of over 140%. This could be a tough pace to keep up for the entire year. Ellison also commented that these new cloud bookings would exceed $250 million by the fourth quarter and total “well over the billion dollars mark” in the next fiscal year.

The stock’s 50-day moving average (MA) is $43.28 and is currently being tested by shares at that level, after shares bounced off the 200-day MA Thursday, which reads at $41.25. The stock is wedged between these averages. Looking at the chart, it is not overly impressive: lower highs look like they are on the way and, generally speaking, the stock looks like it is in a holding pattern.

In the week ahead of earnings, quite a few analysts made calls on Oracle and the direction that it is headed. Sentiment was somewhat mixed:

  • RBC Capital has a Sector Perform rating and increased its price target by $1 to $48.
  • BMO Capital Markets has a Buy rating with a price target of $49.
  • Credit Suisse has a Buy rating and a price target of $47.50.
  • Stifel Nicolaus maintained a Buy rating with a price target of $49.
  • Jefferies has a Hold rating with a price target of $41.
  • Deutsche Bank maintained a Hold rating and price target of $44.

The consensus analyst price target fell in the middle of these ratings at $45.43, implying an upside of roughly 5.7%, from current prices.

In the first half of Tuesday’s trading session, Oracle shares were down 1% to $42.98, in a 52-week trading range of $35.82 to $46.71.

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