Oracle stock rallies on earnings beat, outlook

Oracle stock rallies on earnings beat, outlook

Oracle spent $36 billion in its just completed fiscal year to repurchase shares

Oracle Corp. shares increased in the extended session Wednesday after earnings topped Wall Street estimates and the database giant provided its outlook for a new fiscal year.

Oracle ORCL, -0.42% shares, which had surged as much as 7% following the release of earnings, were up 4.7% as a conference call ended Wednesday afternoon. Shares closed 0.4% lower in the regular session at $52.68, off from their all-time closing high of $55.41 set on April 26. In comparison, the S&P 500 index SPX, +0.30% finished up 0.3% Wednesday, and the Nasdaq Composite Index COMP, +0.42% rose 0.4%.

On the conference call, Co-Chief Executive Safra Catz said she expects currency headwinds to have a 1% negative effect on revenue and cut earnings by a penny a share for the fiscal first quarter. Given the headwinds, Catz forecast first-quarter earnings of 80 cents to 82 cents a share on flat to 2% revenue growth, or revenue of $9.2 billion to $9.39 billion. Analysts expect first-quarter earnings of 80 cents a share on revenue of $9.33 billion.

Catz said she expects fiscal 2020 revenue to grow “faster” than in the previous year and projected “double-digit” earnings-per-share growth. For the year, analysts estimated adjusted earnings to rise 7.6% to $3.79 a share on revenue of $41.15 billion, according to FactSet.

For the 2019 fiscal year, Oracle reported revenue of $39.51 billion, compared with $39.38 billion, and adjusted earnings of $3.52 a share in fiscal 2019.

The company reported fiscal fourth-quarter net income of $3.74 billion, or $1.07 a share, compared with $3.28 billion, or 79 cents a share, in the year-ago period. Oracle reported that fiscal fourth-quarter revenue rose to $11.14 billion from $11.01 billion in the year-ago quarter. Analysts surveyed by FactSet had forecast adjusted earnings of $1.07 a share on revenue of $10.93 billion.

At the end of the fourth quarter, the company had 3.5 billion shares outstanding. Catz said Oracle bought back 734 million shares of stock for the year for $36 billion, for an average of about $49 a share.

Oracle posted cloud services and license support revenue of $6.8 billion, while analysts expected $6.76 billion. Cloud license and on-premise license revenues were $2.5 billion. compared with the $2.32 billion Street expectation.

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