Conservative · Stocks to Consider and Updates

Oracle Beats Earning’s Forecasts; Revenue Disappoints

Redwood City, California’s Oracle Corp. (NYSE: ORCL – $49.18) announced fiscal 2019 first quarter total revenues of $9.2 billion, up 1% compared to last year, but below the consensus views of $9.24 billion. Total Cloud Services and License Support plus Cloud License and On-Premise License revenues were up 2% to $7.5 billion. Cloud Services and License Support revenues were up 3.2% to $6.6 billion, while Cloud License and On-Premise License revenues were $867 million. In the preceding quarter, Oracle had created new revenue reporting structures by merging its fast-growing cloud business with its legacy business of selling software licenses, thus making year-over-year segment comparison a bit tricky. Profit-wise, the provider of business software and systems said adjusted net income was up 10% to $2.8 billion, equal to $0.71 per share compared to $0.62 a year ago and three cents better than Street estimates.

       Thanks in part to strong cash flow of $15.5 billion over the past twelve months, the Board of Directors increased the authorization for share repurchases by $12.0 billion. The Board also announced that it will keep the quarterly dividend at $0.19, yielding investors 1.5%, at current levels. Despite the weaker-than-expected top line growth, which is sending shared down by about 4% in extended hours trading, I continue to like the company’s prospects, as its transition to the cloud continues.

 

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