What to Expect from Oracle's (ORCL) Q4 2019 Earnings After Microsoft Cloud Deal?
Shares of Oracle ORCL are up roughly 19% in 2019 to match its industry’s average climb. And the company on June 6 announced a cloud computing partnership with Microsoft MSFT in an effort to challenge industry giant Amazon AMZN.
With that said, let’s see what to expect from Oracle’s fourth-quarter fiscal 2019 financial results that are due out after the closing bell on Wednesday, June 19 because these results are likely to impact the stock more in the near-term than its recent MSFT deal.
Recent News & Overview
Oracle and Microsoft said the two tech powers have set up a “cloud interoperability partnership” that will allow customers to essentially use both MSFT’s Azure and Oracle Cloud. The deal will enable customers to “migrate and run mission-critical enterprise workloads across Microsoft Azure and Oracle Cloud. Enterprises can now seamlessly connect Azure services, like Analytics and AI, to Oracle Cloud services, like Autonomous Database.”
The move comes as Amazon’s AWS cloud business continues to dominate the industry. Amazon Web Services reportedly controls around 30% of the market, according to Synergy Research Group. Meanwhile, Microsoft has moved into second place at roughly 15%, with Google GOOGL and IBM IBM behind MSFT. Oracle is part of a best of the rest group of enterprise cloud firms, which is why the new partnership could be beneficial for Oracle.
Shares of ORCL are up roughly 16% over the last 12 months to help it crush its industry’s 3.2% average decline over this stretch. However, we can see that the firm has lagged this same group of tech stocks over the last three years. Oracle stock hovered at around $53.62 per share through mid-afternoon trading Friday, down just off its 52-week intraday trading highs of $55.53.
Going forward, Oracle hopes to expand its cloud business to help inspire more investor confidence beyond its wave of share buybacks, which came in second only to Apple AAPL last year, according to a Goldman Sachs GS report.
Outlook & Earnings Trends
Moving on, our current Zacks Consensus Estimate calls for Oracle’s fourth-quarter revenue to dip 2.7% to reach $10.96 billion. Last quarter, the firm’s revenue slipped roughly 1%, but did climb 3% on a constant currency basis and topped our estimate.
At the bottom end of the income statement, Oracle’s adjusted quarterly earnings are expected to climb 8.1% to hit $1.07 per share. This would roughly match Q3 2019’s 8% growth that saw ORCL post earnings of $0.87 per share, which also topped our estimate that called for $0.84 a share.
Oracle has seen zero earnings estimate revisions over the last 90 days for Q4. But the company does have a solid history of quarterly earnings beats, which includes a 3.97% average surprise over the trailing four periods.
Oracle is a Zacks Rank #3 (Hold) at the moment that boasts a “B” grade for Value and an “A” for Momentum in our Style Scores system. Oracle is scheduled to release its fourth-quarter fiscal 2019 financial results after the closing bell on Wednesday, June 19. Make sure to come back to Zacks for a full breakdown of ORCL’s actual quarterly metrics.
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