Back to top

Analyst Blog

Oracle Corp (ORCL - Analyst Report) is set to report fiscal second-quarter 2014 results on Dec 18. In the prior quarter, the company reported a positive surprise of 5.66%. Moreover, Oracle posted an average positive earnings surprise of 2.52% over the past four quarters.

Let us see how things are shaping up for the company in this quarter.

Growth Factors this Past Quarter

Oracle’s second-quarter guidance was cautious due to tough year-over-year comparisons and lack of visibility surrounding the closure of corporate deals.

Management’s forecast for new software license and cloud subscription revenues were to grow in the range of (6.0%) to 4.0%. Hardware product revenues were expected to decline in the range of 11.0% to 1.0%.

Amid slowing IT spending, soft demand environment and sluggish hardware sales, we believe that a rise in new software license and cloud revenues will be positives for Oracle. However, a decline will reflect market share loss to IBM, Cisco, Workday and Salesforce.

Earnings Whispers?

Our proven model does not conclusively show that Oracle is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP: That is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 64 cents. Hence, the difference is of 0.0%.

Zacks Rank #3: Oracle’s Zacks Rank #3 when combined with an ESP of 0.0% makes surprise prediction difficult.

We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat in the upcoming quarter.

Winnebago Industries (WGO - Snapshot Report), with Earnings ESP of +10.26% and a Zacks Rank #1 (Strong Buy).

Apogee Enterprises (APOG - Analyst Report), with Earnings ESP of +3.03% and a Zacks Rank #2 (Buy).

Worthington Industries (WOR - Snapshot Report), with Earnings ESP of +3.57% and a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UTD THERAPE… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%