Shares of Oracle (NASDAQ:
) slumped after the close Wednesday as the company reported worse
than expected earnings.
Oracle reported Non-GAAP EPS of $0.65 which just slightly
missed analyst estimates of $0.66 but revenue came up short of
estimates by more than 4 percent.
Oracle is generally looked at as an indicator of the health of
corporate spending on IT. Thus, the weak data could imply that,
not only could the company be in a slight slump, but broader
corporate investment could have slowed in the the quarter. This
would be a drag on GDP overall.
For the fiscal third quarter, Oracle reported GAAP EPS of
$0.52 and Non-GAAP EPS of $0.65. Analysts were expecting a
reading of $0.66 which would have compared to the Non-GAAP
figure. Revenue for the quarter was a much bigger miss as revenue
was reported at $9 billion for the quarter on expectations of a
reading of $9.38 billion.
Currency impacts had a lot to do with the miss of estimates.
Currency losses resulted in EPS being $0.01 less than without
them, which would have made Oracle report earnings in line with
estimates. Revenue would have also been closer to estimates as
currency movements caused revenue to be 3 percent lower than
"Our non-GAAP operating margin increased to a Q3 record of
47%, and we expect it to reach an all-time high for the fiscal
year," said Oracle President and CFO, Safra Catz. "Both operating
cash flow and free cash flow were at record levels for a Q3, with
operating cash flow of $13.7 billion over the last twelve
"The Oracle Cloud is the most robust and comprehensive cloud
platform available with services at the infrastructure (IaaS),
platform (PaaS) and application (SaaS) level," said Oracle
President, Mark Hurd. "In Q3, our SaaS revenue alone grew well
over 100% as lots of new customers adopted our Sales, Service,
Marketing and Human Capital Management applications in the
"This month we will begin deliveries of servers based on our
new SPARC T5 microprocessor: the fastest microprocessor in the
world," said Oracle CEO, Larry Ellison. "The new T5 servers can
have up to eight microprocessors while our new M5 system can be
configured with up to thirty-two microprocessors. The M5 runs the
Oracle database 10 times faster than the M9000 it replaces."
Oracle shares fell 6.56 percent in the after-market on the
news. However, shares have stabilized at these levels. Investors
await the conference call with management at 5:00 pm
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