When Oracle (ORCL - Get Report) reports after the close on Thursday, investors will look for progress on the company's shift to sales of cloud software and insights into the recent purchases of Textura (TXTR) and Opower (OPWR) .
Wall Street expects Chairman and Chief Technology Officer Larry Ellison and CEOs Safra Catz and Mark Hurd to report earnings of 82 cents per share for the fourth quarter of fiscal year 2016, on $10.46 billion in sales.
"Oracle is very inexpensive," says Jim Cramer, TheStreet's founder and manager of the Action Alerts PLUS Charitable Trust Portfolio. Oracle currently trades at about 19 times trailing twelve-month earnings. "It would be hard for them to surprise on the downside."
In addition to quarterly results, Cramer expects Oracle on Thursday to deliver a critique of competitors Salesforce.com (CRM - Get Report) and Workday (WDAY - Get Report) , both of which have already reported, and lay out the case that it's been winning new clients away from them.
Like many software groups, Oracle is moving from sales of software licenses, which involve large, up-front sales, to a sales model more akin to services, with recurring payments.
Oracle's software-as-a-service offerings include apps for managing relationships with customers, human resource processes, financial resource planning and supply chain functions. The company's platform-as-a-service provides tools for building apps and managing apps, analyzing data and other processes.
Along with an update on cloud services, RBC Capital Markets analyst Ross MacMillan expects details about recent acquisitions.
Oracle agreed to pay $532 million in May for cloud software company Opower, which develops applications to analyze meter data for utilities such as PG&E (PCG - Get Report) and Exelon (EXC - Get Report) . A month earlier, Oracle announced the $663 million acquisition of Textura, which develops software to manage payments and contracts for the construction industry. MacMillan also looks for news on changes to incentives for North American sales staffers.
John DiFucci of Jefferies forecasts a "decent" quarter. While concerned that large deals had slipped to a future quarter, DiFucci noted, delayed contracts "were not lost and some will likely close in the near future."
The fourth quarter is typically Oracle's biggest in terms of revenue, Barclays analyst Raimo Lenschow observed in a report.
"We believe investors are fairly nervous about the magnitude of the license declines, which we expect to more than offset the cloud gains the quarter," he wrote in a report. Meanwhile, the analyst estimates, Oracle's acquisitions of Opower and Textura could add nearly $300 million in sales.
On a positive note, Lenschow suggested that the larger outlook seems to be improving. Companies like networking tech giant Cisco (CSCO - Get Report) and Salesforce, which both ended their quarters in April, had better reports than those that had quarters ending in March, such as Microsoft (MSFT - Get Report) , IBM (IBM - Get Report) and SAP (SAP - Get Report) .
Steve Koenig of Wedbush forecasted "a positive report" for Oracles cloud revenues and guidance, but weakness in sales of licenses and other areas.
The analyst called for a clearer view into the cloud business.
"Our investor conversations suggest some skepticism about [Oracle]'s claims concerning its progress in the cloud," he wrote.
Koenig cited a "divergence" in growth for bookings of recurring revenue in the third quarter with growth in the software as a service and platform as a service billings. The acquisitions of Textura and Opower could make the cloud results more difficult to analyze.
"We think it's time for this leading enterprise software vendor to adopt a more transparent approach to its cloud disclosures," he wrote.