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Oracle's (ORCL) Q4 Earnings: Cloud Offerings in Spotlight

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Oracle (ORCL - Free Report) is set to report fourth-quarter fiscal 2021 results on Jun 15.

The company’s fiscal fourth-quarter results are anticipated to have benefited from strength in its Oracle Cloud Infrastructure (OCI) services as well as other cloud-based applications and Autonomous Database solution.

Nonetheless, higher investments on product development and platform to retain its competitive stance against the likes of dominant cloud players like Amazon’s (AMZN - Free Report) Amazon Web Services, Microsoft's (MSFT - Free Report) Azure and Alphabet's (GOOGL - Free Report) Google Cloud is likely to have affected profitability in the to-be-reported quarter.

Click here to know how the company’s overall fiscal fourth-quarter performance is expected to be.

Oracle Corporation Revenue (Quarterly)

 

Oracle Corporation Revenue (Quarterly)

Oracle Corporation revenue-quarterly | Oracle Corporation Quote

 

Solid Uptake of Cloud Solutions Augur Well

Oracle is also witnessing continued momentum in adoption of its cloud-based solutions, especially NetSuite Enterprise Resource Planning (ERP), Fusion ERP and Fusion Human Capital Management (HCM). This is likely to have aided revenue growth in the fiscal fourth quarter.

In the third quarter of fiscal 2021, Oracle’s Fusion HCM, NetSuite ERP and Fusion ERP businesses reported revenue increases of 21%, 22% and 27%, respectively.

In April 2021, Oracle announced that the company’s Cloud Infrastructure services/resources could be accessed and handled by enterprise clients through their ServiceNow’s IT Operations Management (ITOM) Visibility application and ServiceNow’s service portal.
    
The Zacks Consensus Estimate for Cloud services and license support revenues is pegged at $7.332 billion, indicating an improvement of 7.1% on a year-over-year basis.

Healthy uptake of Exadata cloud solutions, and Autonomous Database offerings coupled with robust demand for the Oracle Dedicated Region Cloud@Customer is likely to have driven the top line.

Moreover, increased availability of Oracle cloud regions globally is expected to have strengthened its competitive position in the cloud computing market. In May 2021, the company launched its second cloud region in Brazil namely Vinhedo Cloud region, marking the 30th cloud region in the world.

Notably, the consensus for Cloud license and on-premise license is pegged at $2.082 billion, indicating an improvement of 6.3% on a year-over-year basis.

Weak IT Spend A Concern

Weakness in IT spending across small- and medium-sized businesses owing to pandemic-induced economic downturn are likely to have affected fiscal fourth-quarter performance.

Markedly, the Zacks Consensus Estimate for Hardware revenues in the fiscal fourth quarter is pegged at $886 million, suggesting a drop of 1.7% on a year-over-year basis. Meanwhile, the consensus mark for Services revenues stands at $726 million, indicating a decline of 1.2% on a year-over-year basis.

At present, Oracle carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

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