We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Oracle (ORCL) Up 7.4% Since Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for Oracle (ORCL - Free Report) . Shares have added about 7.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Oracle due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Oracle reported second-quarter fiscal 2023 non-GAAP earnings of $1.21 per share, which beat the Zacks Consensus Estimate for earnings by 3.42%. The bottom line was up 7% year over year at constant currency or cc.
Management guided non-GAAP earnings per share (EPS) to grow 1-5% year over year at cc and be $1.23-$1.27 per share.
Revenues increased 18% (up 25% at cc) year over year to $12.27 billion and beat the Zacks Consensus Estimate by 2.01%. The top-line performance was mainly driven by strength in infrastructure and applications cloud businesses.
For the fiscal second quarter, Oracle had anticipated total revenues to grow 15-17% year over year at USD and 21-23% at cc.
Revenues from the Americas added $7.78 billion to the total revenues.
Europe/Middle East/Africa added $2.89 billion while revenues from the Asia Pacific were $1.59 billion.
Revenues by Offerings
Oracle’s Cloud services and license support revenues were up 14% in USD and up 20% in cc to $8.6 billion. Cloud license and on-premise license revenues were up 16% in USD and up 23% in cc to $1.4 billion.
For the second quarter of fiscal 2023, Cerner contributed $1.5 billion to the total revenues. The upside can be attributed to continued strength in the Fusion, Autonomous Database and Oracle Cloud Infrastructure (OCI) services.
Cloud Infrastructure (IaaS) revenues were $1.0 billion, up 53% in USD and 59% in constant currency.
Cloud Application (SaaS) revenues were $2.8 billion, up 40% in USD and 45% in constant currency.
Breakup of Cloud Services & License Support Revenues
Applications revenues amounted to $4.08 billion, up 30% year over year (up 35% at cc).
Infrastructure-related revenues were $4.5 billion, up 3% on a year-over-year basis (up 9% at cc).
Hardware revenues were $850 million, which increased 11% year over year (up 16% at cc).
Services revenues rose 74% (up 83% at cc) to $1.39 billion.
Expanding Clientele Remains Noteworthy
Management noted that the strategic back-office cloud applications business increased 26% at cc and now has $5.9 billion in annualized revenues.
Excluding legacy hosting services, infrastructure cloud services revenues grew 69% with annualized revenues of 3.8 billion, including OCI consumption revenues, which were up 88%, Cloud@Customer consumption revenues, which were up 83%, and Autonomous Database, which increased 50%.
Oracle and NVIDIA announced a multi-year partnership to help customers solve business challenges with accelerated computing and artificial intelligence (AI). The collaboration aims to bring the full NVIDIA accelerated computing stack — from GPUs to systems to software — to Oracle Cloud Infrastructure ("OCI"). OCI is adding tens of thousands more NVIDIA GPUs, including the A100 and upcoming H100 to its capacity.
Operating Details
The non-GAAP total operating expenses decreased 18% year over year (down 15% at cc) to $9.2 billion.
The non-GAAP operating income was $5.1 billion, up 5% in USD and up 12% in constant currency. GAAP operating margin was 25%, and the non-GAAP operating margin was 41%.
Balance Sheet & Cash Flow
As of Nov 30, 2022, Oracle had cash and cash equivalents and marketable securities of $7.3 billion compared with $10.4 billion as of Aug 31, 2022.
Operating cash flow and free cash flow for the trailing 12 months ended Nov 31, 2022, amounted to $15.07 billion and $8.3 billion, respectively.
Share Repurchases & Dividends
The company repurchased 6.1 million shares worth approximately $488 million in the fiscal second quarter.
The board of directors declared a quarterly cash dividend of $0.32 per share of outstanding common stock. This dividend will be paid out to stockholders of record as of the close of business on Jan 10, 2023, with a payment date of Jan 24, 2023.
Q3 Guidance
Total revenues for the fiscal third quarter, including Cerner, are expected to grow 21-23% in cc and 17-19% in USD. Total cloud growth, including Cerner, is expected to grow 46-50% in cc and 43-47% in USD.
Non-GAAP EPS is expected to grow between 4% and 8% and be between $1.17 and $1.21 in USD.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -8.45% due to these changes.
VGM Scores
Currently, Oracle has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Oracle has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Oracle is part of the Zacks Computer - Software industry. Over the past month, Salesforce.com (CRM - Free Report) , a stock from the same industry, has gained 8.7%. The company reported its results for the quarter ended October 2022 more than a month ago.
Salesforce.com reported revenues of $7.84 billion in the last reported quarter, representing a year-over-year change of +14.2%. EPS of $1.40 for the same period compares with $1.27 a year ago.
Salesforce.com is expected to post earnings of $1.36 per share for the current quarter, representing a year-over-year change of +61.9%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.3%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Salesforce.com. Also, the stock has a VGM Score of C.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Oracle (ORCL) Up 7.4% Since Last Earnings Report?
A month has gone by since the last earnings report for Oracle (ORCL - Free Report) . Shares have added about 7.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Oracle due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Oracle Q2 Earnings Beat Estimates, Revenues Rise Y/Y
Oracle reported second-quarter fiscal 2023 non-GAAP earnings of $1.21 per share, which beat the Zacks Consensus Estimate for earnings by 3.42%. The bottom line was up 7% year over year at constant currency or cc.
Management guided non-GAAP earnings per share (EPS) to grow 1-5% year over year at cc and be $1.23-$1.27 per share.
Revenues increased 18% (up 25% at cc) year over year to $12.27 billion and beat the Zacks Consensus Estimate by 2.01%. The top-line performance was mainly driven by strength in infrastructure and applications cloud businesses.
For the fiscal second quarter, Oracle had anticipated total revenues to grow 15-17% year over year at USD and 21-23% at cc.
Revenues from the Americas added $7.78 billion to the total revenues.
Europe/Middle East/Africa added $2.89 billion while revenues from the Asia Pacific were $1.59 billion.
Revenues by Offerings
Oracle’s Cloud services and license support revenues were up 14% in USD and up 20% in cc to $8.6 billion. Cloud license and on-premise license revenues were up 16% in USD and up 23% in cc to $1.4 billion.
For the second quarter of fiscal 2023, Cerner contributed $1.5 billion to the total revenues. The upside can be attributed to continued strength in the Fusion, Autonomous Database and Oracle Cloud Infrastructure (OCI) services.
Cloud Infrastructure (IaaS) revenues were $1.0 billion, up 53% in USD and 59% in constant currency.
Cloud Application (SaaS) revenues were $2.8 billion, up 40% in USD and 45% in constant currency.
Breakup of Cloud Services & License Support Revenues
Applications revenues amounted to $4.08 billion, up 30% year over year (up 35% at cc).
Infrastructure-related revenues were $4.5 billion, up 3% on a year-over-year basis (up 9% at cc).
Hardware revenues were $850 million, which increased 11% year over year (up 16% at cc).
Services revenues rose 74% (up 83% at cc) to $1.39 billion.
Expanding Clientele Remains Noteworthy
Management noted that the strategic back-office cloud applications business increased 26% at cc and now has $5.9 billion in annualized revenues.
Excluding legacy hosting services, infrastructure cloud services revenues grew 69% with annualized revenues of 3.8 billion, including OCI consumption revenues, which were up 88%, Cloud@Customer consumption revenues, which were up 83%, and Autonomous Database, which increased 50%.
Oracle and NVIDIA announced a multi-year partnership to help customers solve business challenges with accelerated computing and artificial intelligence (AI). The collaboration aims to bring the full NVIDIA accelerated computing stack — from GPUs to systems to software — to Oracle Cloud Infrastructure ("OCI"). OCI is adding tens of thousands more NVIDIA GPUs, including the A100 and upcoming H100 to its capacity.
Operating Details
The non-GAAP total operating expenses decreased 18% year over year (down 15% at cc) to $9.2 billion.
The non-GAAP operating income was $5.1 billion, up 5% in USD and up 12% in constant currency. GAAP operating margin was 25%, and the non-GAAP operating margin was 41%.
Balance Sheet & Cash Flow
As of Nov 30, 2022, Oracle had cash and cash equivalents and marketable securities of $7.3 billion compared with $10.4 billion as of Aug 31, 2022.
Operating cash flow and free cash flow for the trailing 12 months ended Nov 31, 2022, amounted to $15.07 billion and $8.3 billion, respectively.
Share Repurchases & Dividends
The company repurchased 6.1 million shares worth approximately $488 million in the fiscal second quarter.
The board of directors declared a quarterly cash dividend of $0.32 per share of outstanding common stock. This dividend will be paid out to stockholders of record as of the close of business on Jan 10, 2023, with a payment date of Jan 24, 2023.
Q3 Guidance
Total revenues for the fiscal third quarter, including Cerner, are expected to grow 21-23% in cc and 17-19% in USD. Total cloud growth, including Cerner, is expected to grow 46-50% in cc and 43-47% in USD.
Non-GAAP EPS is expected to grow between 4% and 8% and be between $1.17 and $1.21 in USD.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -8.45% due to these changes.
VGM Scores
Currently, Oracle has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Oracle has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Oracle is part of the Zacks Computer - Software industry. Over the past month, Salesforce.com (CRM - Free Report) , a stock from the same industry, has gained 8.7%. The company reported its results for the quarter ended October 2022 more than a month ago.
Salesforce.com reported revenues of $7.84 billion in the last reported quarter, representing a year-over-year change of +14.2%. EPS of $1.40 for the same period compares with $1.27 a year ago.
Salesforce.com is expected to post earnings of $1.36 per share for the current quarter, representing a year-over-year change of +61.9%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.3%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Salesforce.com. Also, the stock has a VGM Score of C.