Oracle Stock Falls As Quarterly Earnings Miss

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Oracle (ORCL) reported quarterly results late Thursday that missed earnings estimates as the database software company has undergone a major cloud transition and formed a new business model. Oracle stock dropped.




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The company reported adjusted earnings of $1.13 a share on revenue of $10.5 billion. Analysts expected Oracle to report adjusted earnings of $1.18 a share, on revenue of $10.5 billion. Revenue edged up 4% from the year-ago quarter.

Oracle stock fell 5.7% to 73.30 during aftermarket trading on the stock market today. Shares currently trade below the stock’s 50-day and 200-day moving averages.

“In Q3, Oracle delivered over 7% constant currency revenue growth — our highest quarterly organic revenue growth rate since we began our transition to the cloud,” Chief Executive Safra Catz said in written remarks with the Oracle earnings release.

Oracle’s Acquisition Of Cerner

In December, Oracle announced it would acquire medical records company Cerner (CERN) through an all-cash tender offer for $95 a share, or roughly $28.3 billion in equity value. It is Oracle’s largest acquisition ever and moves the database software giant deeper into the health care sector.

Oracle stock set an all-time high on Dec. 10, the day it reported fiscal second-quarter earnings that topped estimates. Revenue jumped 6% to $10.4 billion, its best growth since 2018. But Oracle stock is down 16% since announcing the Cerner deal on Dec. 20.

“We look for management to better articulate its vision for Oracle in the health care vertical and discuss the road ahead,” Monness Crespi Hardt analyst Brian White said in a note to clients.

Oracle Stock Gains Wiped Out

“Oracle’s stock gains — experienced after delivering a strong fiscal second quarter — have been more than wiped out by announcing a poorly communicated, large acquisition that left investors scratching their heads and dumping their shares,” White wrote. He has a buy rating on Oracle stock and price target of 126.

Jefferies analyst Brent Thill raised his price target on Oracle stock to 95, from 80, with a rating of hold.

Over the last several years, Oracle has transitioned from an antiquated business of on-premises database software licensing and maintenance. It’s now a subscription-based software model that taps the benefits of cloud computing.

Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.

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