Oracle dips 12% after lowering guidance for this year! 🔴

Oracle (ORCL.US) shares are declining over 12% after the company published its quarterly report. The company posted an earning of $1.19 per share, slightly surpassing the analysts' expectation of $1.15 per share. However, the revenue stood at $12.45 billion, slightly below the forecast of $12.47 billion. Oracle's cloud services and license support segment did well, with a revenue increase of 13% YoY, standing at $9.55 billion, higher than the expected $9.44 billion. Despite announcing new database hardware and artificial intelligence features during the quarter, the company experienced a decline in other segments; the cloud license and on-premises license sector saw a 10% decrease in revenue, and hardware revenue fell by 6% YoY. 

Sudden decline in share price is mainly caused by the lower guidance and forecasts for this year. Oracle predicts a 5-7% revenue growth for the fiscal second quarter, which is less than the 8% anticipated by analysts.

In a detailed breakdown of the company’s performance, Oracle’s CEO Safra Catz highlighted the ongoing “accelerated transition” of Cerner, a recently acquired electronic health record software company, to the cloud — a move causing "near-term headwinds" to its growth rate as customers shift from licensed purchases to cloud subscriptions.

Highlights:

• Total Revenue: $12.5 billion, up 9% in USD (YoY), and up 8% in constant currency

  • Cloud Revenue (IaaS + SaaS): $4.6 billion, up 30% in USD (YoY), and up 29% in constant currency
  • Cloud Infrastructure (IaaS) Revenue: $1.5 billion, up 66% in USD (YoY), and up 64% in constant currency
  • Cloud Application (SaaS) Revenue: $3.1 billion, up 17% in USD and constant currency (YoY)
  • Fusion Cloud ERP (SaaS) Revenue: $0.8 billion, up 21% in USD (YoY), and up 20% in constant currency
  • NetSuite Cloud ERP (SaaS) Revenue: $0.7 billion, up 21% in USD and constant currency (YoY)

• EPS: $1.19, up 16% in USD (YoY)

Source: xStation 5