Why Oracle Is Monday’s Big Earnings Loser

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Oracle Corp. (NYSE: ORCL) released its fiscal first-quarter financial results after markets closed on Monday. The company said that it had $0.71 in earnings per share (EPS) and $9.2 billion in revenue, compared with consensus estimates that called for $0.69 in EPS and $9.31 billion in revenue. The same period of last year had $0.62 in EPS and $9.21 billion in revenue.

Short-term deferred revenues were up 2% to $10.3 billion compared to a year ago. Operating cash flow was up 5% to $15.5 billion during the trailing 12 months.

In terms of its segments, the company reported:

  • Cloud Services and License Support revenues increased 3% year over year to $6.61 billion.
  • Cloud License and On-Premise License revenues decreased 3% to $867 million.
  • Hardware revenues decreased 4% to $904 million.
  • Services revenues decreased 5% to $813 million.

Safra Catz, Oracle CEO, commented:

We are off to an excellent start with Q1 non-GAAP earnings per share growing 19% in constant currency. That strong earnings per share growth rate increases my confidence that we will deliver on another fiscal year of double-digit non-GAAP earnings per share growth.

Mark Hurd, Oracle CEO, added:

In the first quarter, we increased our market share as customers continued to buy Oracle Fusion ERP to replace their existing SAP and Workday ERP systems. The Oracle Fusion ERP customer count is now nearly 5,500, while the NetSuite ERP customer count is over 15,000. Virtually every analyst ranks Oracle as the market leader in cloud ERP.

Shares of Oracle closed Monday at $49.19, with a consensus analyst price target of $54.04 and a 52-week range of $42.57 to $53.48. Following the announcement, the stock was down over 4% at $46.94 in the after-hours session.