Oracle stock falls following forecast as revenue disappoints

Oracle Corp. shares recouped some of their losses in the extended session Thursday after the forecast revenue range bookended the Wall Street consensus, as the software company’s largest business unit topped forecasts, but its others didn’t.

Oracle
ORCL,
-1.83%

shares were down about 3.5% after hours following the forecast. Prior to the forecast, shares had dropped more than 5% and were around those levels when a conference call with analysts began. Oracle shares declined 1.8% in the regular session to close at $86.87.

On the call with analysts, Oracle Chief Executive Safra Catz forecast fourth-quarter earnings of $1.56 to $1.60 a share on revenue growth of 15% to 17%, or $13.62 billion to $13.85 billion. Analysts surveyed by FactSet had estimated $1.47 a share on revenue of $13.75 billion.

That followed fiscal third-quarter results in which Oracle reported net income of $1.9 billion, or 68 cents a share, compared with $2.32 billion, or 84 cents a share, a year ago.

Adjusted earnings, which exclude stock-based compensation expenses and other items, were $1.22 a share, compared with $1.13 a share in the year-ago period.

Revenue rose to $12.4 billion from $10.51 billion in the year-ago quarter.

Analysts had estimated earnings of $1.20 a share and revenue of $12.43 billion for the third quarter.

Oracle’s largest segment, cloud services and license support, rose 17% to $8.92 billion. Cloud license and on-premise license revenue was flat at $1.29 billion from a year ago, while hardware revenue rose 2% to $811 million, and services revenue jumped 74% to $1.38 billion.

Analysts had forecast cloud services and license support revenue of $8.83 billion, cloud license and on-premise license revenue of $1.39 billion, hardware revenue of $815.5 million and services revenue of $1.43 billion.

“Since June of last year when we acquired Cerner, that business has increased its healthcare contract base by approximately $5 billion,” said Larry Ellison, Oracle’s chairman, in a statement. “While we are pleased with this early success of the Cerner business, we expect the signing of new healthcare contracts to accelerate over the next few quarters.”

Oracle’s board also hiked the quarterly dividend 25% to 40 cents a share. The dividend will be paid April 24 to shareholders of record as of April 11.

Oracle shares are up 14% over the past 12 months, versus a 14% decline by the iShares Expanded Tech-Software Sector ETF 
IGV,
-2.26%
,
 while the S&P 500 index 
SPX,
-1.85%

has dropped 8% and the tech-heavy Nasdaq Composite Index 
COMP,
-2.05%

has fallen 14% in that time.

Source: https://www.marketwatch.com/story/oracle-stock-drops-more-than-5-after-slight-revenue-miss-600cc51c?siteid=yhoof2&yptr=yahoo