Investing 10-06-2024 17:08 16 Views

Oracle (ORCL) releases its Q4 earnings tomorrow: here are 4 things to expect

U.S. software giant Oracle is one of the last bigwigs to release its financial results this earnings season, but investors are hoping it’ll prove worth the wait.

The New York Stock Exchange-listed company is one of the last original Silicon Valley software stocks from the 1970s that are still standing (alongside titans like Microsoft and IBM, of course) and markets are always interested in how ‘biggish tech’ stocks that aren’t Magnificent 7, but are still noteworthy, are performing.

Analysts’ forecasts for tomorrow

First off, it’s worth noting that Oracle has made a habit of defying expectations in the past. Nearly every single quarter of the past two years, Oracle’s earnings per share have exceeded estimates given ahead of the earnings.

However, expectations for tomorrow aren’t set extremely high. Earnings per share in particular are expected to come down to around $1.65 per share, which works out to about a 1.2% drop in EPS year-over-year.

However, the company’s revenue is not expected to be as disappointing, and will probably come in at around $14.5 billion for the quarter.

If that proves to be the case, it will mean a significant rise from last year’s well-received Q4 FY 2023 report, which boasted a quarterly revenue of $13.8 billion and an annual one of $50 billion – which was at the time a 22% increase year-over-year.

Public perception and market sentiment

And this is bittersweet because, even more than Oracle needs good financial results tomorrow, they more need to post results that market sentiment will react positively to.  

On the surface, things are not doing badly at all for the company. The Oracle stock price is up by more than 21% so far this year at the time of this article going to press.

However, it’s not doing great either – at least, not compared to other software companies. Its overall up by only 8.37% in the past 12 months, standing in stark contrast to some other tech companies. Consider, for example, that German software peer SAP SE has seen its stock price rise almost 43% in the same time period.  

Summary: 5 things to expect from Oracle’s earnings report tomorrow

In short, here are a few things to (probably) expect tomorrow:

Decent Q4 revenues overall, likely up 15% or more Disappointing earnings per share, with EPS likely down or flat year-on-year A rise in sales from the company’s cloud services However, there may have been a drop in their actually cloud license sales themselves

Concluding thoughts

In the AI race, there have definitely been winners like Nvidia and TSMC and so, consequently, there must have been laggers. Oracle tends to be seen as the latter, as the company appears to still be grappling with how to use their cloud-based interoperability and software vendor know-how to leverage off of the AI revolution.

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