Post Earnings Coverage as Oracle Outperformed Projections

Upcoming AWS Coverage on SAP SE

LONDON, UK / ACCESSWIRE / March 28, 2017 / Active Wall St. announces its post-earnings coverage on Oracle Corp. (NYSE: ORCL). The Company announced its financial results for the first quarter fiscal 2017 (Q3 FY17) on March 15, 2017. The Redwood Shores, California-based Company’s quarterly non-GAAP total revenues and diluted EPS rose on a year-over-year basis, beating market consensus estimates. Register with us now for your free membership at:

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One of Oracle’s competitors within the Application Software space, SAP SE (NYSE: SAP), is estimated to report earnings on April19, 2017. AWS will be initiating a research report on SAP SE following the release of its next earnings results.

Today, AWS is promoting its earnings coverage on ORCL; touching on SAP. Get our free coverage by signing up to:

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Earnings Reviewed

In Q3 FY17, Oracle reported GAAP total revenues of $9.21 billion compared to $9.01 billion recorded at the end of Q3 FY16. The Company’s non-GAAP total revenues increased 3% during Q3 FY17 to $9.27 billion from $9.01 billion in Q3 FY16. Non-GAAP total revenues numbers for the reported quarter has outperformed market expectations of $9.23 billion.

The software developer reported Q3 FY17 GAAP net income of $2.24 billion, or $0.53 per diluted share, versus $2.14 billion, or $0.50 per diluted share, in Q3 FY16. Moreover, the Company’s non-GAAP net income for Q3 FY17 came in at $2.89 billion, or $0.69 per diluted share, compared to $2.73 billion, or $0.64 per diluted share in the last year quarter. The Company’s non-GAAP diluted earnings per share also outperformed market earnings estimates of $0.62 per diluted share.

Operating Metrics

During the three months ended on February 28, 2017, the Company’s GAAP total operating expenses were $6.25 billion compared to $5.99 billion in Q3 FY16. In Q3 FY17, non-GAAP total operating expenses came in at $5.33 billion compared to $5.19 billion in Q3 FY16. The Company’s GAAP operating income for Q3 FY17 stood at $2.96 billion, or 32% of GAAP total revenues versus $3.03 billion, or 34% of GAAP total revenues, in Q3 FY16. Moreover, the Company’s non-GAAP operating income increased during Q3 FY17 to $3.94 billion, or 43% of non-GAAP total revenues, from $3.82 billion, or 42% of non-GAAP total revenues, in the previous year’s quarter.

Segment Performance

During Q3 FY17, total cloud revenues surged 62% y-o-y to $1.19 billion from $735 million in Q3 FY16. Meanwhile, the Company’s total on-premise software revenues were down by 3% to $6.18 billion in Q3 FY17 from $6.35 billion in Q3 FY16. Furthermore, total hardware revenues declined 9% y-o-y in Q3 FY17 to $1.03 billion from $1.14 billion in Q3 FY16. However, total services revenues grew 2% to $812 million in Q3 FY17 from $793 million in Q3 FY16.

Geographical Contribution

In Q3 FY17, Americas, the largest market for Oracle, generated revenues of $5.22 billion, up from $4.94 billion in Q3 FY16. Revenues from Asia/Pacific region was $1.43 billion in Q3 FY17, rising from $1.41 billion in the prior year’s comparable quarter. However, revenues from Europe, Middle East, Africa regions fell to $2.56 billion in Q3 FY17 from $2.66 billion in Q3 FY16.

Cash Flow & Balance Sheet

For the nine months ended on February 28, 2017, Oracle generated $9.66 billion in cash from operations compared to $9.89 billion at the end of three quarters in the year ago same period. The Company had cash and cash equivalents balance of $19.75 billion as on February 28, 2017, compared to $20.15 billion, at the close of books on May 31, 2016.

Dividend and Share Repurchases

In its earnings press release, Oracle’s Board of Directors announced a 27% hike in quarterly dividend to $0.19 per share of outstanding common stock. The dividend is payable on April 26, 2017, to shareholder of record at the close of business on April 12, 2017.

During the reported quarter, Oracle repurchased 30 million shares for a total of $500 million. Furthermore, in the last 12 months, the Company repurchased a total of 124 million shares for a total of $5 billion and paid out dividends of $2.5 billion.

Stock Performance

On Monday, March 27, 2017, the stock closed the trading session at $44.84, slightly up 0.43% from its previous closing price of $44.65. A total volume of 8.93 million shares have exchanged hands. Oracle’s stock price rallied 3.87% in the last month, 15.54% in the past three months, and 15.19% in the previous six months. Moreover, the stock surged 17.08% since the start of the year. The Company’s shares are trading at a PE ratio of 21.20 and have a dividend yield of 1.43%.

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