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Alberto Abaterusso
Alberto Abaterusso
Articles (1707) 

Oracle Issues 1st-Quarter Numbers

Earnings beat estimates, but revenue falls short of expectations

September 12, 2019 | About:

Shares of Oracle Corp. (NYSE:ORCL) rose 0.52% to $56 in extending trading on Wednesday after beating estimates for first-quarter 2020 earnings by 1 cent.

The software company posted earnings of 63 cents per share, up 10.5% from the year-ago quarter, on $9.22 billion in revenue, reflecting a 0.2% increase year over year. Revenue fell $70 million short of expectations.

The cloud services and license support segment contributed 74%, or $6.81 billion, to total revenue, and the cloud license and on-premise license segment generated 9%, or $812 million. Further, the hardware segment contributed 9% to sales, or $815 million, and the service segment posted $786 million in sales, which accounted for 8% of total revenue.

“We expect Oracle's operating margins, earnings per share and free cash flow all to grow," CEO Safra Catz said. "We're off to a good start in FY20.”

Moreover, the company posted a 4% increase in operating income to $2.9 billion for an operating margin of 31.2%, which was an improvement from 30.2% a year ago.

The balance sheet had approximately $35.7 billion in cash and short-term securities and $54.4 billion in total debt as of Aug. 31. Deferred revenues totaled $10.09 billion and total equity was $19.02 billion.

The board authorized a $15 billion stock repurchase and announced the payment of a quarterly dividend of 24 cents per share on Oct. 24, which is in line with the previous distribution. The company will pay the quarterly dividend to shareholders of record as of Oct. 10.

Based on the closing share price of $56.29 on Wednesday, the dividend generates a forward dividend yield of 1.73% versus the industry median of 1.7%.

Over the past year through Sept. 11, the stock climbed 15% to above the 200-day simple moving average line. The price is still below the 100- and 50-day lines.

The stock has a market capitalization of $187.77 billion. The 52-week range is $42.40 to $60.50.

Sell-side analysts on Wall Street recommend holding Oracle with an average price target of $56.70.

Disclosure: I have no positions in any securities mentioned.

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About the author:

Alberto Abaterusso
If somebody asks what being a value investor means, Alberto Abaterusso would answer, “The value investor is not just the possessor of the security that represents the company, but he is the owner of that company. As an owner of the company the value investor is actively involved in the dynamics of that company and his first concern is how to have sales progressively growing. Also, the value investor is probably one of the most demanding persons in the world concerning sales.”

Abaterusso is a freelance writer based in The Netherlands. He primarily writes about gold, silver and precious metals mining stocks. His articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. Alberto holds an MBA from Università degli Studi di Bari (Italy), Aldo Moro.

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