ORCL Stock Price Falls Over 5% Pre-Market: Why It Happened

By Amit Chowdhry ● June 16, 2021
  • The stock price of Oracle Corporation (NYSE: ORCL) fell by over 5% pre-market. This is why it happened.

The stock price of Oracle Corporation (NYSE: ORCL) fell by over 5% pre-market. Investors are responding negatively to the company’s fiscal 2021 fourth quarter and fiscal full year financial results.

Oracle reported that its total quarterly revenues were up 8% year-over-year to $11.2 billion. And cloud services and license support revenues were up 8% to $7.4 billion. The cloud license and on-premise license revenues were up 9% to $2.1 billion.

Q4 GAAP operating income was up 5% to $4.5 billion and GAAP operating margin was 40%. And non-GAAP operating income was up 6% to $5.4 billion and non-GAAP operating margin was 49%. The GAAP net income was up 29% to $4 billion and GAAP earnings per share was up 39% to $1.37. The non-GAAP net income was up 20% to $4.5 billion, and non-GAAP earnings per share was up 29% to $1.54.

During an earnings call, Oracle CEO Safra Catz said that earnings excluding some items will be $0.94 to $0.98 per share for the quarter ending in August. According to Bloomberg, analysts were expecting $1.03 per share. Oracle is increasing its investment in the cloud.

KEY QUOTES:

“Our Q4 performance was absolutely outstanding with total revenue beating guidance by nearly $200 million, and non-GAAP earnings per share beating guidance by $0.24. Our multi-billion dollar Fusion and NetSuite cloud applications businesses saw dramatic increases in their already rapid revenue growth rates: Fusion ERP was up 30% in Q3 and up 46% in Q4, Fusion HCM was up 23% in Q3 and up 35% in Q4, NetSuite was up 24% in Q3 and up 26% in Q4. Oracle Fusion is the world’s biggest cloud ERP business; Oracle NetSuite is the world’s second biggest cloud ERP business. Revenue from our Gen2 Cloud Infrastructure business including Autonomous Database grew over 100% in Q4. The accelerating growth rates of both our applications and infrastructure cloud businesses this year drove earnings per share growth up to 21% in FY21. That is the fourth consecutive year of double-digit earnings per share growth at Oracle Corporation.”

— Oracle CEO Safra Catz

“The world’s two most popular databases are the Oracle Autonomous Database and Oracle MySQL. The Oracle Database once again delivered solid revenue growth in FY21. And while our Oracle Database business as measured by revenue currently dwarfs our MySQL database business—that is about to change because the latest version of Oracle MySQL has been upgraded to include a revolutionary new ultra-high-performance parallel processing query engine called HeatWave. Independent analysts have tested and confirmed that Oracle MySQL with HeatWave runs 10 to 100 times faster than Amazon’s version of MySQL called Aurora. This technological breakthrough is causing several of Amazon’s customers to start moving their Aurora workloads to Oracle MySQL. And industry analysts are telling us they are seeing a 10x increase in Oracle Cloud Infrastructure customer inquiries. Both the Oracle Autonomous Database and Oracle MySQL with HeatWave technology have captured the technology high-ground in the cloud database business—and that bodes well for the future of the Oracle Cloud.”

— Oracle Chairman and CTO Larry Ellison

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.