Oracle Tanks on Earnings Miss, Alibaba Falls Despite Finance Unit's Valuation

NEW YORK (TheStreet) -- Oracle (ORCL) plunged Thursday, following its fourth quarter earnings and revenue miss. Alibaba (BABA) dipped lower, despite its finance unit receiving an approximate $45 billion valuation. Skyworks Solutions (SWKS) jumped after increasing its quarterly dividend.

Oracle plummeted 4.8% to close at $42.74.

The enterprise software giant took a hit after missing its fiscal fourth quarter revenue and earnings estimates. Revenue came in lighter than expected as new software licence sales declined 17% to $3.1 billion from a year ago, which missed analysts estimates. 

In the current quarter, Oracle said it expects its first quarter earnings to come in between 56 cents and 59 cents a share. Wall Street, however, was expecting adjusted earnings of 61 cents a share.

Although the company missed its fourth quarter earnings and revenue estimates, it pointed to a stronger-than-expected performance with its cloud offerings. Citigroup analyst Walter Pritchard, cited in a Barron's report, said:

New cloud bookings of $426 million was ahead of guided $300 million and clearly accelerated. However, SaaS/PaaS gross margin deteriorated further and on 28% higher SaaS/PaaS revenue in fourth quarter 2015, Oracle gross profit was 14% lower.


Alibaba fell 0.06% to end the session at $86.75.

The Chinese e-commerce giant dipped despite its finance affiliate Ant Financial Services Group receiving a valuation of approximately $45 billion, according to a Reuters report

The estimated valuation was the result of Ant Financial selling some of its shares to outside investors, such as China Development Bank Capital and also to a holding company tied to the co-founder of Yunfeng Capital, which is Alibaba founder Jack Ma's private equity firm, according to Reuters.

The multi-billion dollar valuation, noted Reuters, apparently is driven by both government approval for Ant to operate an Internet bank and sell wealth management products, as well as operating Alibaba's Alipay digital payments platform.


Skyworks Solutions jumped 3.2% to close at $109.98.

The analog chip maker got a boost after doubling the size of its quarterly cash dividend to 26 cents a share from 13 cents a share that it doled out in the previous quarter, according to a report in Dividend News.  

The dividend is payable to shareholders of record as of Aug. 6 and will be paid on Aug. 27, the report states.

Skyworks' chips are in a large swath of smartphones, as well as in devices that are connected to each other wirelessly, as part of the movement called the Internet of Things. That has been helping to drive the company's financial results and share price.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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