Oracle tanks 5% as the company reports a 6% year over year decline in Q4 revenue

Written by: Wajeeh Khan
June 17, 2020
  • Oracle tanks 5% as the company reports a 6% year over year decline in Q4 revenue.
  • The tech company earns 96 pence per share in Q4 versus 92 pence per share expected.
  • The U.S. multinational company refrains from providing guidance for fiscal 2021.

Oracle Corporation (NYSE: ORCL) released its quarterly financial results on Tuesday that posted a 6% year over year decline in revenue. Shares of the company were reported about 5% down in after-hours trading on Tuesday. Zoom announced an agreement with Oracle to expand its cloud in late April.

At £42.10 per share, Oracle is roughly 2% down year to date in the stock market after recovering from a low of £31.37 per share in March. Learn more about how to choose winning stocks.

Oracle’s Q4 financial results versus analysts’ estimates

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According to Refinitiv, analysts were expecting the company to print £8.49 billion in revenue in the fiscal fourth quarter. Their estimate for earnings per share (EPS) was capped at 92 pence. In its report on Tuesday, Oracle fell short of the revenue estimate posting a lower £8.23 billion in Q4. Its EPS, however, came in at 96 pence per share that topped experts’ forecast.

Oracle’s cloud services & license support generated £5.46 billion in revenue for the company in Q4 that represented a 1% year over year growth but was slightly lower than the analysts’ expectations. According to FactSet, experts had estimated the company to register £1.71 billion in revenue from its cloud & on-premises licenses segment. At £1.56 billion instead, Oracle’s revenue from this business missed the estimate and marked a 22% decline on an annualized basis.

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CEO Safra Catz comments on the earnings report

CEO Safra Catz commented on the earnings report on Tuesday and said:

“As the quarter progressed, we saw a dropoff in deals, especially in the industries most affected by the pandemic. As countries begin reopening their economies, many of these discussions have already resumed. Since these were not lost to competitors, we believe that most of this business will ultimately be booked, and while some customers have deferred projects, we’re also rapidly building new pipelines with customers that are moving their on-premise workloads to the cloud.”

For the fiscal first quarter, Catz now anticipates adjusted earnings per share of 66.98 pence to 70.17 pence. She also estimated Oracle’s Q1 revenue to lie within the range of a 1% decline to a 1% growth. As per Refinitiv, analysts are expecting 67.77 pence of adjusted earnings per share in Q1 and £7.25 billion in revenue that translates to a 1.4% decline as compared to the same quarter last year.

The CEO also said that she expects the company’s growth in revenue to accelerate this year but refrained from giving guidance for fiscal 2021.