Oracle posts stronger than expected financial results in Q3 and guidance for Q4

Oracle (NYSE: ORCL) released its quarterly earnings report on Thursday that came out stronger than the analysts’ estimates for earnings and revenue. The upbeat performance in the recent quarter was bolstered with a hawkish forecast for the current quarter. Following Oracle’s Thursday’s announcement, the company was seen trading higher in the stock market.

The
initial response of the stock to the earnings report and quarterly guidance was
a 5% gain. Much of it, however, was lost later in the day as share prices declined
by around 10% in extended trading.

Oracle’s
Performance In The Stock Market

At
the time of writing, Oracle is exchanging hands at $45.56 per share in the
stock market that translates to around 15% decline in 2020 so far. Its
performance in 2019, on the contrary, remained moderately upbeat with an annual
gain of around 15%. Share prices were seen at $45.0 in January 2019 while the
stock closed the last year at $53.0 in December. Oracle currently has a market
cap of $141.75 billion.

According
to Refinitiv, analysts were expecting Oracle to print $9.75 billion in revenue
in the third quarter. Their estimate for earnings was capped at 96 cents per
share. In its report on Thursday, the American multinational computer
technology corporation said it generated a higher $9.80 billion in Q4 and made
97 cents of earnings per share in the recent quarter.

In
the quarter
that ended on 29^th February, Oracle’s revenue was recorded 2%
higher on an annualized basis. Oracle’s leading business of license support and
cloud services at large, generated $6.93 billion in revenue for the company in
the third quarter that came stronger than FactSet’s estimate of $6.90 billion.

The
business for on-premises license and cloud license contributed $1.23 billion to
Oracle’s quarterly revenue and topped FactSet’s forecast of $1.l9 billion. On a
year over year basis, however, the revenue from this segment was noted 2% down.

Oracle’s
Guidance For Fiscal Fourth Quarter

With
a 6% quarterly decline, the Hardware segment posted $857 million in revenue versus
$878 million expected. Services revenue, on the other hand, was 1% down in Q3
at $778 million versus $781 million expected.

In
its guidance
for the fiscal fourth quarter, CEO Safra Catz said that the company now
expects to make $1.20 to $1.28 of earnings per share in Q4 versus the analysts’
estimate of $1.23. Its quarterly revenue, on the other hand, is likely to print
between a 2% decline to a 2% growth range versus the experts’ forecast of 1.5%
growth. The wider range in the quarterly forecast, the CEO added, was because
of the Coronavirus undriven uncertainty.

Oracle’s
board also announced the company’s share buyback program to expand by $15
billion on Thursday.