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

Written by: Michael Harris
March 13, 2020
  • Oracle posts stronger than expected financial results in Q3 and guidance for Q4.
  • Oracle posts $9.80 billion in revenue in the third quarter versus $9.75 billion expected.
  • Oracle makes 97 cents of earnings per share in the third quarter versus 96 cents expected.

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

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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 29th 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.