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Oracle Corporation (ORCL)

- NYSE
  • Sep. 19, 2014, 4:54 PM
    • Though Oracle's (ORCL -4%) cloud-related sales saw healthy growth in FQ1, its core database business saw negative license growth, notes Deutsche's Karl Keirstead, downgrading shares to Hold. "Coupled with Larry Ellison’s decision to give up the CEO role, our confidence in the core database business is getting tested and we’d prefer to step to the sidelines while Oracle shares are still near their 10-year high."
    • While Oracle blames the database weakness on tough comps and sales execution - the latter is a common excuse among enterprise software firms - Keirstead also sees other factors at work: A mature relational database market; Microsoft's share gains; and a secular shift to new data types (e.g. Hadoop/NoSQL) and cloud apps (often running on non-Oracle databases). He estimates Oracle's FQ2 guidance implies a 3%-4% Y/Y drop in license revenue.
    • D.A. Davidson (Neutral) also isn't thrilled with Oracle's numbers. "ORCL's financial results have now either missed or come in at the low end of management's guidance range in 7 of the last 9 quarters." Ditto Sterne Agee: "Given the current moderate size of the cloud business, the transition will span several years and create both revenue and EPS estimate volatility."
    • On the other hand, Sterne (like many others) isn't concerned about Oracle's CEO change, calling it "more of a change in titles than in functions." On the CC (transcript), new co-CEOs Safra Catz and Mark Hurd insisted there will be no major operational changes.
    • Wedbush, however, sees negative long-term implications. "Mr. Ellison's desire to delegate more responsibility (and credit) to Safra Catz and Mark Hurd is understandable ... but it underlines our view that Oracle's days as an organic grower are rapidly coming to an end."
    • Prior Oracle coverage
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  • Sep. 18, 2014, 5:40 PM
    • Oracle (NYSE:ORCL) guides on its FQ1 CC for FQ2 Y/Y revenue growth of 0%-4%, and EPS of $0.66-$0.70. That's below a consensus for 4.8% growth and EPS of $0.74.
    • Software/cloud revenue is expected to grow 3%-6% Y/Y vs. 6% in FQ1, and hardware revenue is expected to be flat to down 10%. SaaS/PaaS revenue is expected to grow 39%-44%, and IaaS revenue 40%-44%.
    • Oracle largely blames the near-term weakness on a transition to cloud subscriptions from up-front licenses, though it also admits execution issues are hurting hardware and services sales. Micros is expected to provide a slight boost to FQ2 results.
    • Shares -2.3% AH.
    • Prior Oracle coverage.
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  • Sep. 18, 2014, 4:29 PM
    • Oracle (NYSE:ORCL) has added $13B to its buyback plan; that's good for repurchasing 7% of shares at current levels. As it is, $2B was spent on buybacks in each of the last three quarters.
    • Software and cloud revenue (76% of total revenue) rose 6% Y/Y in FQ1 to $6.6B, hitting the low end of guidance for 6%-8% growth. However, new software license revenue (pressured by cloud competition) fell 2% to $1.37B.
    • License update/product support revenue (fairly stable) rose 7% to $4.7B. Cloud app (SaaS) and app platform (PaaS) revenue rose 32% to $337M, towards the high end of guidance for 25%-35% growth. Cloud infrastructure (IaaS) revenue grew 26% to $138M, topping guidance for 10%-20% growth.
    • Hardware revenue (hurt by UNIX server declines) remains weak, falling 8% to $1.17B; that's soundly below guidance for -1% to +3% growth. Hardware products -14%, support -1%. Services revenue -7% to $855M.
    • GAAP opex +2% to $5.6B; sales/marketing spend +5% to $1.71B, R&D +7% to $1.32B.
    • Shares -2.3% AH. CC at 5PM ET, guidance will be provided.
    • FQ1 results, CEO news, PR
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  • Sep. 18, 2014, 4:11 PM
    • Along with its FQ1 results, Oracle (NYSE:ORCL) announces Larry Ellison is resigning as CEO. President/ex-H-P CEO Mark Hurd and CFO Safra Catz will act as co-CEOs going forward.
    • Ellison, 69, is taking over the role of chairman from Jeff Henley, who has held it for 10 years, and has also been named CTO. Henley is now vice chairman.
    • Sales, service, and "vertical industry global business units" will report to Hurd. Manufacturing, finance, and legal teams will report to Katz. Software and hardware engineering teams will continue reporting to Ellison.
    • Director Michael Boskin: "Larry has made it very clear that he wants to keep working full time and focus his energy on product engineering, technology development and strategy."
    • Shares -2.7% AH following the news and Oracle's FQ1 miss.
    | 9 Comments
  • Sep. 18, 2014, 4:03 PM
    • Oracle (NYSE:ORCL): FQ1 EPS of $0.62 misses by $0.02.
    • Revenue of $8.6B (+2.6% Y/Y) misses by $180M.
    • Shares -3.49% AH.
    • Press Release
    | 1 Comment
  • Sep. 17, 2014, 5:35 PM
  • Sep. 15, 2014, 7:30 AM
    • A provider of content storage management solutions that help companies mitigate, manage, and monetize large-scale media assets, Front Porch Digital helps businesses handle fast-expanding, complex volumes of digital media content like high-def films and shows, medical images and records, and real-time security-monitoring fees.
    • Terms of Oracle's (NYSE:ORCL) purchase were not disclosed.
    • Source: Press Release
    • Presentation
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  • Sep. 11, 2014, 7:08 PM
    • After moving back above the $100/share level, Apple (NASDAQ:AAPL) is back over the $600B mark in market cap, pushing it nearly $200B above Exxon Mobil (NYSE:XOM), the next largest company in the U.S.
    • XOM is still valued at more than $400B, but Google (NASDAQ:GOOG) at $397B and Microsoft (NASDAQ:MSFT) - which has surged in 2014, adding $74B in market cap to $386B - are closing the gap.
    • Berkshire Hathaway (NYSE:BRK.B) completes the top five with a $339B market cap; no other companies are worth more than $300B.
    • Rounding out the top 20 market caps: JNJ, WFC, GE, WMT, CVX, PG, JPM, FB, VZ, IBM, PFE, KO, ORCL, T, MRK.
    | 43 Comments
  • Sep. 2, 2014, 5:28 PM
    • Concur (NASDAQ:CNQR) approached SAP and Oracle (NYSE:ORCL) to "gauge their interest" in an acquisition, sources tell Bloomberg. Oracle, set to buy point-of-sale hardware vendor Micros for $5.3B, is said to have passed.
    • No details are given on SAP's reaction. Back in January, the German software giant suggested it could make another big cloud software acquisition - it already has a few under its belt. But in April, SAP, which is counting on cloud growth to offset slumping traditional license sales, stated it considers itself under no pressure to make a deal.
    • Concur has pared its AH gains: The cloud travel/expense software provider is now up 11%. Its market cap stands at $6.4B.
    • Earlier: Concur reportedly exploring sale
    | Comment!
  • Aug. 27, 2014, 7:21 PM
    • IDC estimates global server sales rose 2.5% Y/Y in Q2 to $12.6B. That marks a turnaround from the 2.2% drop seen in Q1, and the 4.4% drop seen in Q4. Gartner estimates sales grew 2.8%.
    • IDC declares the server market, hurt in recent quarters by system consolidation and a shift in demand towards the white-label gear beloved by Web giants (referred to by IDC as ODM Direct), is seeing "the beginning of a cyclical refresh cycle." It sees the pending launch of Intel's (NASDAQ:INTC) Grantley Xeon CPUs, along with Microsoft's plans to end Windows Server 2003 support, lifting sales into 2015.
    • Sales of x86 servers (mostly Intel-based) rose 7.8% in Q2, and now make up 78% of industry revenue. Non-x86 server sales fell 12.8%.
    • Market leader H-P's (NYSE:HPQ) share rose 40 bps Y/Y to 25.4%, with x86 growth offsetting Itanium weakness. #2 IBM's share fell 340 bps to 23.6% ahead of the sale of its x86 server ops to Lenovo; on the bright side, IBM's decline narrowed from Q1's 600 bps.
    • #3 Dell's share fell 160 bps to 16.2%. #4 Oracle's (NYSE:ORCL) grew 10 bps to 5.9%, with engineered system growth offsetting declines for older UNIX/SPARC server lines. #5 Cisco (NASDAQ:CSCO), which recently proclaimed its UCS server ops are on a $3B/year run rate, saw its share rise 140 bps to 5.8% on the back of 35% growth. Cisco should pass Oracle in a quarter or two.
    • ODM Direct vendors saw their share grow 110 bps to 6.6%. The shares of all other vendors rose 190 bps to 16.1%.
    • Related tickers: SMCI, MLNX, QLGC, ELX
    | 7 Comments
  • Jul. 31, 2014, 2:01 PM
    • Oracle (ORCL -0.8%) is buying TOA Technologies, a developer of cloud-based software for managing, interacting with, and delivering customer requests to a company's field service workers. Terms are undisclosed.
    • TOA's clients include Home Depot, Vodafone, and Dish Network; ClickSoftware (CKSW -0.3%) is among its rivals. The company's products complement Oracle's Service Cloud platform, which has its roots in the company's acquisition of cloud customer support software vendor RightNow.
    • Oracle has been busy fleshing out its CRM software portfolio in order to better compete against Salesforce (relies on partners for field service software ... for now) and SAP. The software giant bought leading cloud marketing data services firm BlueKai earlier this year, and CRM price quote software vendor BigMachines last year.
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  • Jul. 29, 2014, 1:38 PM
    • Oracle (ORCL +0.8%) has awarded Larry Ellison 3M stock options for 2014, well below the 7M he has been awarded over each of the prior 8 years. Likewise, Mark Hurd and CFO Safra Catz have seen their awards drop to 2.25M from 5M.
    • The award cuts follow mounting criticism of Oracle's executive compensation from shareholders and proxy advisers. In a non-binding vote, shareholders voted against Oracle's proposed compensation plan at last October's annual meeting.
    • Ellison still owns 25% of Oracle, a stake worth $45B at current levels.
    | 13 Comments
  • Jul. 29, 2014, 7:14 AM
    • Oracle (NYSE:ORCL) has cut back on its yearly stock grants given to its top execs, including CEO Larry Ellison and co-Presidents Mark Hurd and Safra Catz.
    • The cuts follow waves of shareholder opposition against the excessive compensation paid to the company's senior management.
    • Ellison's stock-option grants were decreased from 7M to 3M options, while Hurd's and Catz's were cut from 5M to 2.25M shares.
    | 2 Comments
  • Jul. 25, 2014, 4:52 AM
    • The European Comission has announced that EU antitrust regulators will determine whether to clear Oracle's (NYSE:ORCL) $5.3B bid to buy Micros (NASDAQ:MCRS) by August 29.
    • Oracle is looking to continue its fast-expanding cloud business through the new acquisition, and it will be the company's biggest purchase in five years.
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  • Jul. 15, 2014, 7:07 PM
    • Oracle's (NYSE:ORCL) new Big Data SQL software allows users to run joint queries across both SQL databases such as Oracle's flagship 12c, and semi-structured and unstructured data stores such as the Hadoop big data framework and NoSQL databases.
    • Hadoop and NoSQL are widely used in big data projects due to their scalability and support for a variety of data formats. The Oracle solution runs on top of the company's Big Data Appliance - 3rd-party hardware support will be added if demand is strong. The appliance runs a Hadoop distribution from Cloudera, which recently received funding from Intel at a $4.1B valuation.
    • Microsoft has also shown an interest in developing hardware/software bundles that support joint SQL/unstructured data queries. Both Microsoft and Oracle are hoping SQL databases, which still offer advantages in data consistency and complex query support, play a role in a healthy percentage of big data projects as spending on them takes off.
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  • Jul. 1, 2014, 12:29 AM
    • A week after announcing a $5.3B deal to buy Micros, Oracle (ORCL) has sold $10B in debt. Maturity dates range from 3 years to 30. 5-year notes yield just 2.3%, and 30-year notes 4.5%. The sale is the 2nd-largest dollar-denominated corporate bond offering in 2014, behind Apple's $12B April offering.
    • Aside from financing the Micros deal, there's a good chance some of the funds will be used on buybacks. Oracle spent $2B on buybacks in both the February and May quarters.
    • The software giant had $38.8B in cash/investments at the end of May (much of it offshore), and $24.2B in debt.
    | 4 Comments
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Company Description
Oracle Corporation develops, manufactures, markets, hosts and supports database and middleware software, application software, cloud infrastructure, hardware system including computer server, storage and networking products and related services.
Sector: Technology
Country: United States