What to Expect From Oracle Earnings

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Oracle Corp. (NYSE: ORCL) is set to report its fiscal fourth-quarter financial results after the markets close on Thursday. The consensus estimates call for $0.82 in earnings per share (EPS) on $10.47 billion. In the same period of last year, the company posted EPS of $0.78 and $10.71 billion in revenue.

With shares trading around 15 times estimated 2016 earnings, and with a solid free cash flow yield, many analysts also feel that Oracle’s 12C database cycle starts to contribute during calendar 2016, and the stock could very well be poised for what they term a breakout year. After recent investors meetings, some analysts raised fiscal year 2017 cloud margins to 66% from 63% and earnings per share to $2.81. Some also believe that the software giant may be on the verge of a multiyear database product cycle.

The company reported solid results for the previous quarter, with license earnings below estimates but revenue from the cloud much higher. Some analysts feel fiscal 2016 will be a trough year for company in many ways, and they note that the maturing sales force and selling strategy is beginning to unlock pent-up cloud demand within the company’s sizable customer base.

The company develops, manufactures, markets, sells, hosts and supports database and middleware software, application software, cloud infrastructure, hardware systems and related services worldwide. It licenses its Oracle Database software to customers, which is designed to enable reliable and secure storage, retrieval and manipulation of various forms of data. Its Oracle Fusion Middleware software aims to build, deploy, secure, access and integrate business applications, as well as automate their business processes.

A few analysts weighed in on Oracle prior to the release of the earnings report:

  • Merrill Lynch reiterated a Buy rating.
  • Morgan Stanley reiterated an Equal Weight rating with a $41 price target.
  • Barclays reiterated a Buy rating with a $48 price target.
  • Jefferies reiterated a Buy rating with a $50 price target.
  • Wedbush reiterated a Neutral rating with a $40 price target.
  • MKM reiterated a Hold rating with a $42 price target.
  • Goldman Sachs reiterated a Buy rating with a $48 price target.
  • Pacific Crest reiterated a Hold rating.
  • Nomura reiterated a Buy rating with a $44 price target.
  • JPMorgan reiterated an Underperform rating.

So far in 2016, Oracle has outperformed the broad markets, with the stock up 6%. However, over the past 52 weeks the stock is down over 12%.

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Shares of Oracle closed Wednesday down 1% at $38.44, with a consensus analyst price target of $43.86 and a 52-week trading range of $33.13 to $43.10.