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Oracle Posts Subdued Q3 Results
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Oracle Posts Subdued Q3 Results

American multinational computer technology company Oracle Corporation (ORCL) has reported disappointing results for the third quarter of Fiscal Year 2022.

Q3 Performance

The company reported adjusted earnings of $1.13 per share, which lagged the consensus estimate of $1.18 per share and declined 2.6% year-over-year. Oracle’s third-quarter performance was marred primarily due to the lower share price of Oxford Nanopore and an operating loss at Ampere.

Additionally, total revenues of $10.51 billion grew 4% year-over-year and matched analysts’ expectations. 

Cloud services and license support revenues grew 5% year-over-year to $7.6 billion, while Cloud license and on-premise license revenues came in at $1.3 billion, up 1%. 

Further, total Cloud Revenue (IaaS plus SaaS) surged 24% to $2.8 billion, while Fusion ERP cloud revenue and NetSuite ERP cloud revenue grew 33% and 27%, respectively.

Executive Comments 

Oracle’s CEO Safra Catz said, “In Q3, Oracle delivered over 7% constant currency revenue growth—our highest quarterly organic revenue growth rate since we began our transition to the cloud” 

Looking forward, Oracle’s Chairman and CTO Larry Ellison said, “In Q3, Oracle completed development of the multi-cloud version of our MySQL HeatWave open-source database… In a few weeks, MySQL HeatWave will also be available in the Amazon Cloud and the Microsoft Azure Cloud. MySQL HeatWave was designed to compete with Amazon’s version of MySQL called Aurora, Snowflake and other popular cloud databases. What customer and database analysts are saying about Oracle’s new MySQL HeatWave database is simply astonishing.” 

Guidance

For the fourth quarter, the company expects revenues to rise in the range of 3-5%. It anticipates adjusted EPS to be between $1.40 and $1.44. EPS is expected to fall due to some large investment gains recorded last year.

Wall Street’s Take  

Overall, the stock has a Moderate Buy consensus rating based on 5 Buys and 9 Holds. The Oracle price target of $98.64 implies 28.7% upside potential. Shares have jumped 15.5% over the past year.

Positive Sentiment

TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on Oracle, as 11.5% of investors on TipRanks increased their exposure to ORCL stock over the past 30 days.

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