Oracle Corporation (ORCL), SAP AG (ADR) (SAP): Should You Hit the Panic Button on This Stock?

Page 1 of 2

This was one tech giant investors had a lot of hope from. Sadly, its recently announced numbers didn’t live up to expectations. What does that say about the stock’s future? Well, let’s see..

Oracle Corporation (NASDAQ:ORCL)

Oracle Corporation (NASDAQ:ORCL) announced lackluster results for the third quarter of 2013. Following the earnings release, the company’s share tumbled nearly 10%. Let’s see what happened.

That don’t impress me much

Total revenue fell 1% from last year to $9 billion. The major reason was quoted as poor sales execution. The slip was mainly due to a 4% fall in revenue from software, which contributes to approximately 74% of the total revenue. Revenue from new software license sales, along with cloud-based subscriptions, decreased 2%.

Revenues from the two segments went down to $2.3 billion for the quarter. Further, revenue from hardware also contracted 16% year on year, mainly due to weak performance by Oracle’s M Series servers.

However, Oracle’s GAAP earnings per share are up from $0.49 in the same quarter last year to $0.52 this quarter. There has been no percentage change in net income from the same quarter last year, while operating income is up 1%.

It is to be noted that had there been no strengthening of the U.S. Dollar against foreign currencies, there would have been no year on year change in Oracle Corporation (NASDAQ:ORCL)’s total revenues.

Tomorrow belongs to us

In the months to come, Oracle Corporation (NASDAQ:ORCL) plans to begin delivering new servers based on the SPARC T5 microprocessor, believed to be “the fastest microprocessor in the world.” Further, the M9 server line is soon to be replaced by an advanced M5 server. Imminent release of new products was also one of the reasons for the drop in hardware sales the last quarter, as customers postponed hardware system purchases.

To some extent, the poor sales results are also due to the European crisis, leading to a fall in demand. In fact, sale from hardware system products in Europe, Middle East & Africa declined nearly 24% as compared to the same period last year.

Slowin’ down

This wasn’t unexpected. Macroeconomic sluggishness has been a problem faced by most technology companies in recent times. Oracle Corporation (NASDAQ:ORCL)’s major competitor, International Business Machines Corp. (NYSE:IBM), also saw a similar decline in revenue from Europe, Middle East & Africa in the last quarter.

At $9.1 billion, IBM’s revenue from this region was down 5% year on year. However, IBM saw an 11% increase in revenue from Brazil, Russia, India, and China as compared to last year. This is in contrast to Oracle, which saw a decline in revenue in all geographic regions.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

The 10 Biggest Outlet Malls in USA

The 5 Most Popular Rap Songs of All Time

The 10 Countries that Eat the Most Meat

The10 Most Expensive Countries to Fly To

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!