Why Oracle Faced a Tough Q4 and What Comes Next

By Chris Lange Updated Jan 11, 10:08PM EST · Published Jun 20, 9:05AM EDT

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Why Oracle Faced a Tough Q4 and What Comes Next — © Thinkstock

Oracle Corp. (NYSE: ORCL) released its fiscal fourth-quarter financial results after the markets closed on Tuesday. The company said that it had $0.99 in earnings per share (EPS) and $11.25 billion in revenue, compared with consensus estimates of $0.94 in EPS on revenue of $11.19 billion in. The same period of last year reportedly had EPS of $0.89 and $10.94 billion in revenue.

At the end of the quarter, short-term deferred revenues were up 2% to $8.4 billion.

One of the notable changes in this report is that Oracle will not be listing its platform-as-a-service (PAAS) and software-as-a-service (SAAS) segment revenues going forward, which could have some investors concerned. In terms of its segments, the firm reported:

Cloud services and license support revenues increased 6% year over year to $6.77 billion.
Cloud license and on-premise license revenues decreased 6% to $2.48 billion.
Hardware revenues decreased 2% to $1.12 billion.
Services revenues decreased 3% to $863 million.

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Looking ahead to the fiscal first quarter, the company expects to see EPS in the range of $0.67 to $0.69 and revenues up about 1% to 3% on constant currency basis. The consensus estimates call for $0.72 in EPS and $9.53 billion in revenue for the quarter.

Separately, the board of directors declared a quarterly cash dividend of $0.19 per share of outstanding common stock. This dividend will be paid to stockholders of record as of the close of business on July 17, with a payment date of July 31.

Oracle CEO Safra Catz commented:

Last year, I forecast double-digit non-GAAP earnings per share growth for FY18 and we delivered 14% growth this year, largely driven by strong growth in our cloud businesses. Looking ahead to FY19, I expect revenue growth will enable us to deliver double-digit non-GAAP earnings per share growth once again.

Shares of Oracle closed Tuesday at $46.29, with a consensus analyst price target of $55.73 and a 52-week trading range of $44.04 to $53.48. Following the announcement, the stock was down about 4% at $44.48 in early trading indications Wednesday.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.