Oracle Stock Drops After ‘In-between’ Earnings Report

Oracle Stock

Oracle Stock (NYSE:ORCL)

On Friday, investors dumped Oracle (NYSE:ORCL) stock because the company reported and forecast results for its fiscal third quarter that were mostly unremarkable. Oracle stock dropped about 4% this morning.

Safra Catz, CEO of business software giant Oracle, said late Thursday that the company anticipates profits, excluding one-time items, of between $1.56 and $1.60 a share for the current business quarter, which concludes in May. Catz said that Oracle’s revenue should increase by 16% compared to last year.

Even adjusting for one-time gains and losses, Oracle posted a third-quarter profit of $1.22 per share on sales of $12.4 billion. During the three months ending in February, Oracle stock was expected to generate $1.20 in profit per share on revenue of $12.42 billion, according to projections made by Wall Street analysts.

Oracle, according to Raimo Lenschow, an analyst at Barclays, had an “in-between quarter” that “did not constitute a catalyst” for the company.

Lenschow wrote on Friday that many investors would remain suspicious. In Oracle’s words, “if Oracle is accurate, then we would have a multi-year narrative here,” Investors would be wise to hold off on making any decisions until they see the real data.

According to Lenschow, one of Oracle’s problems is that its cloud licensing and support income was the same compared to a year ago. At the same time, analysts had predicted such sales would increase by 7.2%.

Although maintaining an equal weight recommendation on Oracle stock, Lenschow raised his price objective for the company’s stock to $85 per share from $81.

While Brian White of Monness, Crespi, and Hardt was less pessimistic, the firm maintained its buy recommendation on Oracle stock. White praised Oracle, saying the business is “executing effectively in a volatile environment” and that the future looks solid. White said, “Oracle has the chance to get exposure to digital modernization activities in the healthcare business and participate in a compelling cloud transition.”

With the $28.3 billion purchase of Cerner in 2022, Oracle could significantly expand its presence in the healthcare market. Oracle said that Cerner’s contributions to revenue for the fiscal third quarter amounted to $1.5 billion.

Featured Image: Unsplash @ BoliviaInteligente

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