What To Expect When Oracle (ORCL) Reports Its Fiscal Fourth Quarter Results Wednesday

NEW YORK (TheStreet) -- Shares of Oracle (ORCL) were gaining 1.7% to $44.47 Tuesday ahead of the IT company's fiscal fourth quarter earnings report expected after the market close on Wednesday.

Oracle expects to report earnings of 90 cents to 96 cents a share for the fiscal fourth quarter. Analysts expect Oracle to report earnings of 87 cents a share and revenue of $10.95 billion for the fiscal fourth quarter.

In the fiscal third quarter, Oracle reported earnings of 68 cents a share, in line with analysts' estimates for the quarter. The company reported revenue of $9.33 billion for the fiscal third quarter, below analysts' estimates of $9.46 billion.

About 9.3 million shares of Oracle were traded by 12:38 p.m. Tuesday, compared to the company's average trading volume of about 12.5 million shares a day.

TheStreet Ratings team rates ORACLE CORP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate ORACLE CORP (ORCL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year and expanding profit margins. We feel its strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • ORCL's revenue growth has slightly outpaced the industry average of 5.0%. Since the same quarter one year prior, revenues slightly increased by 0.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • ORACLE CORP reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ORACLE CORP increased its bottom line by earning $2.39 versus $2.26 in the prior year. This year, the market expects an improvement in earnings ($2.86 versus $2.39).
  • ORCL's debt-to-equity ratio of 0.67 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.48 is very high and demonstrates very strong liquidity.
  • After a year of stock price fluctuations, the net result is that ORCL's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • You can view the full analysis from the report here: ORCL Ratings Report

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