Tue, Mar. 17, 5:31 PM
- With a strong dollar having a big impact on near-term sales (as it is for peers), Oracle (NYSE:ORCL) has once provided all of its guidance (CC webcast) in constant currency.
- In constant currency, the enterprise software giant expects 1%-6% Y/Y FQ4 revenue growth and EPS of $0.90-$0.96; consensus (in actual dollars) is for 0.9% revenue growth and EPS of $0.94.
- Software/cloud revenue is expected to grow 1%-6% in CC; hardware systems guidance is once more at -2% to +8%. SaaS/PaaS growth is expected to be at 26%-30%, and IaaS growth at 29%-33%.
- Co-CEO Safra Catz asserts near-term sales are being impacted by a faster-than-expected transition to cloud subscriptions from up-front licenses. Though hardware system product revenue fell 3% Y/Y thanks to ongoing declines in SPARC/UNIX server sales, engineered systems revenue rose by double digit; Oracle claims it's taking high-end server share from IBM and HP.
- Shares have risen to $44.00 AH. The 52-week high is $46.71.
- FQ3 results, details, PR
Tue, Mar. 17, 4:21 PM
- Oracle (NYSE:ORCL) uses its FQ3 report to state it's hiking its quarterly dividend by $0.03 to $0.15/share; that's good for a 1.4% yield at current levels. The next dividend will be paid on April 28 to shareholders on record as of April 7.
- Software/cloud revenue rose 1% Y/Y in FQ3 to $7.1B, and 7% in constant currency; guidance was for 5%-8% constant currency growth. Hardware system revenue fell 2% to $1.3B, and rose 5% in constant currency; guidance at CC was -2% to +8%.
- Traditional software license revenue (hurt by cloud software adoption) fell 7% to $1.98B, a bigger decline than FQ2's 4%. Cloud app and app platform (SaaS/PaaS) revenue rose 30% to $372M, and cloud infrastructure (IaaS) revenue 28% to $155M. Software license/product support revenue (fairly stable) rose 2% to $4.66B, and other services revenue fell 3% to $858M.
- Cost controls helped EPS meet estimates in spite of the revenue miss: GAAP operating expenses rose 4% to $5.94B. R&D rose 6% to $1.37B, and sales/marketing just 1% to $1.84B; G&A was flat at $252M. Also boosting EPS: $2B was spent on buybacks.
- With forex acting as a headwind, Asia-Pac revenue fell 19% to $1.38B, and EMEA revenue 4% to $2.81B. Americas revenue rose 4% to $5.13B.
- ORCL +0.9% AH to $43.25. CC at 5PM, guidance will be provided.
- FQ3 results, PR
Tue, Mar. 17, 4:02 PM
Mon, Mar. 16, 5:35 PM
Dec. 17, 2014, 5:26 PM
- Oracle (NYSE:ORCL) has declined to provide guidance in absolute dollars on its FQ2 CC. In constant currency, the company expects FQ3 revenue to be up 4%-8% Y/Y, and EPS to be in a range of $0.69-$0.74. Consensus (based on absolute dollars, naturally) is for 4% revenue growth and EPS of $0.73.
- If exchange rates remain where they are, forex is expected to have 4%+ impact on absolute dollar revenue growth, and a $0.04 impact on EPS.
- In constant currency, software/cloud revenue is expected to be up 5%-8% Y/Y (~1%-4% in absolute dollars, at current exchange rates). Within cloud, SaaS/PaaS and IaaS revenue is respectively forecast to grow 30%-34% and 29%-33%; total cloud revenue was up 45% in FQ2. Hardware system growth guidance is set at -2% to +8%.
- ORCL +5.5% AH. Morgan Stanley's pre-earnings upgrade is looking good.
- FQ2 results, PR
Dec. 17, 2014, 4:18 PM
- Oracle's (NYSE:ORCL) total software/cloud revenue rose 5% Y/Y in FQ2 to $7.3B, in-line with guidance for 3%-6% growth. However, hardware system revenue grew 1% to $1.3B, beating guidance for flat to -10% growth.
- SaaS, (cloud app), PaaS (cloud app platform), and IaaS (cloud infrastructure) revenue collectively rose 45% to $516M; guidance was for 39%-44% SaaS/PaaS growth and 39%-43% IaaS growth.
- On the other hand, traditional software license revenue remains pressured by the cloud migration, it fell 4% to $2.05B. Services revenue fell 3% to $935M. License update/product support revenue (50% of revenue, driven by past deals) rose 6% to $4.8B.
- GAAP opex +3% Y/Y to $6.06B, even with revenue growth. Sales/marketing spend only rose 1% to $19B; R&D rose 9% to $1.39B.
- Americas revenue +5% Y/Y to $5.2B; EMEA +3% to $2.9B; Asia-Pac roughly flat at $1.5B (an improvement from recent quarters).
- $2.1B was spent on buybacks, up slightly from FQ1's $2B. Forex had a 400 bps impact on revenue.
- ORCL +2.7% AH. CC at 5PM ET, guidance should be provided.
- FQ2 results, PR.
Dec. 17, 2014, 4:02 PM
Dec. 16, 2014, 5:35 PM
Oct. 22, 2014, 1:22 PM
- Enterprise software vendors are having a rough day after VMware (VMW -5.6%) provided light Q4 guidance to go with a Q3 beat.
- On its CC (transcript), VMware also reported its bookings fell Q/Q in Q3. They were hurt by Russian and German softness, and a failure to close a major enterprise license agreement (ELA) with a federal client. ELAs made up 29% of Q3 bookings, down from 37% in Q2.
- Rivals Oracle (ORCL -1.5%), Red Hat (RHT -3.3%), and Citrix (CTXS -1.5%) are among the decliners, as are Splunk (SPLK -4.7%), Tableau (DATA -2.8%), Qlik (QLIK -2.5%), and MicroStrategy (MSTR -0.9%). Oracle provided light guidance last month.
- Several enterprise cloud software stocks are also selling off: N -2.5%. VEEV -2.9%. ZEN -4.2%. CSOD -2.3%. SAAS -3.2%. NOW -1.7%.
- Nomura and Raymond James have downgraded VMware. Nomura thinks 2015 guidance (expected in January) will also be light, and believes slow vSphere server virtualization growth (affected by competition and high penetration rates) will remain a headwind, given it's still over half of VMware's business. "Growth has to come from the vCloud Suite ... other newer products are just too small still to matter."
- Some of those "other newer products" are doing well: VMware's end-user computing license bookings (boosted by the AirWatch acquisition) rose over 60% Y/Y in Q3, and its much-hyped NSX software-defined networking platform now has 250+ paying customers (up from just 100 a few months ago).
- A slew of enterprise tech names sold off on Monday in response to IBM's Q3 report. Big Blue's software sales fell 2% Y/Y in Q3, after rising 1% in Q2. CA, Citrix, and ServiceNow report after the bell.
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
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.
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
Sep. 18, 2014, 4:03 PM
Sep. 17, 2014, 5:35 PM
Jun. 20, 2014, 11:00 AM
- The license growth worries that plagued Oracle (ORCL -5.7%) much of last year are back with a vengeance following yesterday's FQ4 miss, in spite of the in-line guidance that followed it.
- Citi has cut shares to Neutral, arguing SaaS (cloud app) strength isn't reflected in earnings. Before the downgrade, the firm noted estimated total license revenue of $4.09B missed its $4.3B estimate.
- But Oracle also has its defenders. BMO (Outperform) asserts Oracle's cloud transition efforts are still going well, and that "new product releases across the board should be a tailwind to growth."
- The firm attributes the FQ4 miss to an apparent "thousand cuts" that include deal slippage, Asia-Pac weakness (an ongoing issue), a shift from up-front license payments to cloud subscriptions, and potential order delays ahead of Oracle's 12c database launch (previous).
- Separately, Oracle has announced it's buying LiveLOOK, a developer of co-browsing/screen sharing tech for Web customer support apps. Terms are undisclosed.
- Oracle, which bought cloud customer support firm RightNow in 2011, plans to integrate LiveLOOK's offerings with its Service Cloud platform. Rival LivePerson (LPSN -0.9%) recently announced a deal to buy co-browsing tech developer Synchronite.
- Prior coverage. CC transcript.
Jun. 19, 2014, 5:26 PM
- Oracle (ORCL) expects FQ1 revenue growth of 4%-6% Y/Y, and EPS of $0.62-$0.66. That's in-line with a consensus of 4.8% growth and $0.64.
- New software license/cloud revenue is expected to be up 6%-8% Y/Y, an improvement from FQ4 and driven by an expected 25%-35% increase in SaaS/PaaS revenue. Hardware systems revenue is expected to see -1% to +3% growth.
- CFO Safra Catz noted a $102M forex loss (Venezuela-related) pressured FQ4 EPS by $0.02.
- FQ4 results, details
ORCL vs. ETF Alternatives
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.
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