This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Oracle shares tank: what just happened?

By Chris Lau for Kapitall.

It is never a good feeling for investors when stock gains for the year to date get wiped away on a single day. That is exactly what happened for Oracle (ORCL) shareholders. After reporting quarterly results that missed analyst expectations, shares dropped sharply. Should investors be wary of this database giant? Is caution warranted for cloud software companies in general?

Oracle’s results miss

Oracle reported quarterly license revenue that missed estimates. Oracle earned $0.92 per share, missing estimates by three cents. Revenue was $11.32 billion, missing estimates by $160 million. The firm forecast revenue would grow in its Q1, by between 4% and 6%. Earnings are forecast to be $0.62 – $0.66 per share. Revenue growth is projected to come from the license and cloud segments. By contrast, hardware systems revenue could be flat.

New Oracle Database launch

Despite the setback, investors could look forward to the release of Oracle 12c. Historically, customers upgraded to newer versions of the database. This would mean revenue growth for Oracle in future quarters.

Alternative Investments

Revenue and profit growth for Oracle depends on demand for cloud solutions. The firm is not alone in awaiting a rebound in the sector. Rackspace Hosting Inc. (RAX) reported a weak quarter recently, which led to a drop in its shares.

Rackspace sells web-based hosting solutions. Oracle needs to include remote hosting in its product sales to stay competative.

Salesforce.com Inc. (CRM) is another cloud computing services company investors could consider. The software giant is ahead of the curve in offering cloud based solutions.

Investors should note that shares of Salesforce.com are expensive. They also offer no dividend, compared Oracle’s 1.18% dividend yield (based on a recent closing price).

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

DOW 17,776.91 +93.33 0.53%
S&P 500 2,081.34 +12.58 0.61%
NASDAQ 4,997.4590 +5.5190 0.11%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs