Back to top

Image: Bigstock

Factors Setting the Tone for Oracle's (ORCL) Q3 Earnings

Read MoreHide Full Article

Oracle (ORCL - Free Report) is slated to release third-quarter fiscal 2021 results on Mar 10.

For third-quarter fiscal 2021, the company anticipates total revenue growth rate on a year-over-year basis in the range of 2-4% at USD and 1-3% at cc. The Zacks Consensus Estimate for revenues for the fiscal third quarter is pegged at $10.06 billion, indicating growth of 2.6% on a year-over-year basis.

Oracle expects non-GAAP earnings per share between $1.09 and $1.30 at USD, and $1.06 and $1.10 at cc. The Zacks Consensus Estimate for earnings has been stable in the past 30 days at $1.11, suggesting growth of 14.4% from the year-ago reported figure.

Factors Likely to Have Influenced Q3 Performance

Oracle’s fiscal third-quarter results are likely to reflect gains from robust demand for its Cloud Infrastructure services, driven by benefits comprising enhanced security and management, higher-performance, and cost effectiveness.

Oracle Corporation Price and EPS Surprise

Oracle Corporation Price and EPS Surprise

Oracle Corporation price-eps-surprise | Oracle Corporation Quote

Moreover, solid uptake of the Exadata Cloud Service offering to support the surge in demand from on-premise customers may get reflected in the fiscal third-quarter revenues.

During the quarter under review, the company added new logistics capabilities to its Oracle Fusion Cloud Supply Chain & Manufacturing (SCM) solution. The new capabilities will provide companies in containing costs and help with improved decision-making and enhance customer experience.

The company rolled out latest version of its converged database — Oracle Database 21c — on its cloud platform. The company’s Oracle Apex (Application Express) Application Development is also available as a managed cloud service.

Further, growing clout of its next-generation autonomous database and Oracle Dedicated Region Cloud, supported by ML and AI capabilities, might have benefited the fiscal third-quarter performance.

Besides, coronavirus crisis induced rapid uptake of cloud-based applications amid work-from-home and online learning wave may have bolstered adoption. This, in turn, is likely to have contributed to the to-be-reported quarter’s performance.

In fact, notable names including Zoom Video Communications (ZM - Free Report) and 8x8 (EGHT - Free Report) , have already implemented Oracle Cloud Infrastructure (OCI) services to enhance video meeting solutions in a secure manner amid explosive growth in user base.

During the to-be-reported quarter, the company in collaboration with Mastercard (MA - Free Report) introduced an end-to-end solution to facilitate governments and financial services’ along with non-profit organizations globally to rationalize the distribution of economic aid. Incremental adoption of the company’s offerings might get reflected in the fiscal third-quarter top line.

Additionally, robust momentum in cloud-based Fusion HCM, NetSuite ERP and Fusion ERP applications is expected to have continued in the fiscal third quarter, driven by coronavirus crisis-induced demand for cloud-based applications. Notably, Fusion HCM, NetSuite ERP and Fusion ERP businesses were up 24%, 20% and 33%, respectively, in the fiscal second quarter.

Oracle, currently carrying a Zacks Rank #3 (Hold), is also expected to have gained from adoption of customer engagement platforms. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

However, increasing expenses on product development, on account of product roll outs and enhancements amid stiff competition in the cloud computing market and decline in IT spending, might have weighed on the fiscal third-quarter performance.

Zacks Names “Single Best Pick to Double”

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.

Free: See Our Top Stock and 4 Runners Up >>

Published in