Back to top

Analyst Blog

Oracle Inc. (ORCL - Analyst Report) is set to report fourth-quarter fiscal 2014 results on Jun 19, 2014. In the previous quarter, the company delivered a negative earnings surprise of 4.48%. On an average, Oracle has delivered positive earnings surprise of 1.44% in the last four quarters. Let’s see how things are shaping up for this quarter.

Growth Factors in the Past Quarter

Oracle reported disappointing third-quarter 2014, as both earnings and revenues missed the Zacks Consensus Estimate. However, management provided optimistic guidance for the fourth quarter, with earnings forecasted to be in the range of 92 to 99 cents per share much better than 87 cents reported in the year-ago quarter.

Revenues on a non-GAAP basis are expected to grow in the range of 3.0% to 7.0% (in dollar). Cloud subscription and new software license revenues (expected to range within 0.0% to 10.0%) are expected to be the key growth factors in the quarter. Growth in hardware (expected in the range of 0.0% to 10.0%) will be keenly watched by investors.

Oracle’s strong and innovative product portfolio and encouraging growth prospects in cloud and Big Data are the key positives. Moreover, higher subscription revenues are expected to provide a recurring high-margin revenue base. Nevertheless, competition from the likes of IBM, Workday and SAP AG (SAP - Analyst Report) remains a concern.

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 #1, 2 or 3 for this to happen. This is not the case here as you will see below.

Zacks ESP: Oracle currently has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 92 cents.

Zacks Rank: Oracle has a Zacks Rank #3 (Hold), which when combined with a 0.00% ESP, makes surprise prediction difficult.

We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Here are a couple of stocks worth considering that, as per our model, have the right combination of elements to post an earnings beat this quarter:

Micron Technology (MU - Analyst Report), Earnings ESP of +5.80% and a Zacks Rank #1 (Strong Buy).

FactSet Research (FDS - Analyst Report), Earnings ESP of +2.38% and a Zacks Rank #2 (Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

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 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
THE PANTRY… PTRY 21.27 +3.30%
ERBA DIAGNO… ERB 2.99 +2.75%
SANCHEZ ENE… SN 34.00 +2.13%
PIPER JAFFR… PJC 54.49 +1.60%
INTEL CP INTC 35.04 +1.57%