Microsoft Corporation (MSFT), NetSuite Inc (N): Will Oracle Corporation (ORCL) Earnings Turn the Stock Around?

Page 1 of 2

Oracle Corporation (NYSE:ORCL) will release its quarterly report on Wednesday, and given the big drop the stock suffered after previous reports, investors are nervous about the tech giant’s impending results. Yet substantial growth in Oracle Corporation (NYSE:ORCL) earnings could spark a nice rally from the stock’s past declines.

Oracle CorporationOracle Corporation (NYSE:ORCL) helped pioneer the enterprise-software space, with its business orientation largely escaping the notice of mainstream home customers but still dominating corporate America and companies around the world. Yet as large tech companies have started crossing their traditional boundary lines to invade each other’s territory, Oracle Corporation (NYSE:ORCL) has had to balance opportunities from new niches against defending its core focus area. Let’s take an early look at what’s been happening with Oracle over the past quarter and what we’re likely to see in its report.

Stats on Oracle

Analyst EPS Estimate $0.56
Change From Year-Ago EPS 5.7%
Revenue Estimate $8.48 billion
Change From Year-Ago Revenue 3.3%
Earnings Beats in Past 4 Quarters 1

Source: Yahoo! Finance.

How will Oracle earnings fare this quarter?
Analysts have cut back their views on Oracle Corporation (NYSE:ORCL) earnings slightly in recent months, reducing their August-quarter estimates by $0.02 per share and their full-year fiscal 2014 projections by $0.03 per share. The stock hasn’t performed well either, falling 3% since mid-June.

Most of those declines came immediately after Oracle’s May-quarter earnings report. On its surface, Oracle’s report wasn’t all that bad, with adjusted earnings up 5% and the company choosing to double its dividend and boost its stock-buyback program. Yet just a 2% rise in revenue spooked those investors who’d expected to see more top-line growth in a traditionally stronger seasonal quarter for the company, and as a result, the stock dropped 9% in a single day.

In order to try to spur faster growth, Oracle Corporation (NYSE:ORCL) has had to make some competitive compromises. In late June, the company made a joint presentation with Microsoft Corporation (NASDAQ:MSFT) that detailed the ways in which Oracle’s software can work with Microsoft Corporation (NASDAQ:MSFT)’s Azure cloud services suite. The move was interesting, given that both companies have their own rival products that fill in each other’s gaps. But in the company’s words, “Oracle’s strategy and commitment is to support multiple platforms,” including Windows.

Page 1 of 2