Company Update (NYSE:ORCL): Oracle Corporation Reports Fiscal 2016 Fourth-Quarter and Full-Year Results


Oracle Corporation (NYSE:ORCL) announced fiscal 2016 Q4 results. Total Q4 Revenues were $10.6 billion, down 1% in U.S. dollars and flat in constant currency. Cloud plus On-Premise Software Revenues were $8.4 billion, flat in U.S. dollars and up 2% in constant currency. Cloud software as a service (SaaS) and platform as a service (PaaS) revenues were $690 million, up 66% in U.S. dollars and up 68% in constant currency. Total Cloud revenues, including infrastructure as a service (IaaS), were $859 million, up 49% in U.S. dollars and up 51% in constant currency. Operating Income was $4.0 billion, and Operating Margin was 37%. Non-GAAP Operating Income was $4.8 billion, and the non-GAAP Operating Margin was 45%. Net Income was $2.8 billion while non-GAAP Net Income was $3.4 billion. Earnings Per Share was $0.66, while non-GAAP Earnings Per Share was $0.81. Without the impact of the U.S. dollar strengthening compared to foreign currencies, Oracle’s reported GAAP Earnings Per Share would have been 2 cents higher and non-GAAP Earnings Per Share would have been 1 cent higher.

Short-term deferred revenues were $7.7 billion, up 6% in U.S. dollars and up 7% in constant currency compared with a year ago. Operating cash flow on a trailing twelve-month basis was $13.6 billion.

For fiscal 2016, Total Revenues were $37.0 billion, down 3% in U.S. dollars and up 2% in constant currency. Cloud plus On-Premise Software Revenues were $29.0 billion, down 2% in U.S. dollars and up 3% in constant currency. Cloud SaaS and PaaS revenues were $2.2 billion, up 49% in U.S. dollars and up 52% in constant currency. Total Cloud revenues, including IaaS, were $2.9 billion, up 36% in U.S. dollars and up 40% in constant currency. Operating Income was $12.6 billion, and Operating Margin was 34%. Non-GAAP Operating Income was $15.8 billion and non-GAAP Operating Margin was 43%. Net Income was $8.9 billion while non-GAAP Net Income was $11.2 billion. Earnings Per Share was $2.07, while Non-GAAP Earnings Per Share was $2.61. Without the impact of the U.S. dollar strengthening compared to foreign currencies, Oracle’s reported GAAP and non-GAAP Earnings Per Share would have been 17 cents higher.

“Fourth quarter SaaS and PaaS revenue growth accelerated to 68% in constant currency, significantly higher than my guidance,” said Oracle CEO, Safra Catz. “SaaS and PaaS gross margins continued to improve throughout the year, exiting FY16 at 56%. Bookings in Q4 were also very strong enabling us to raise our guidance for Q1 SaaS and PaaS revenue growth, which we now expect to be between 75% and 80%.”

“We added more than 1,600 new SaaS customers and more than 2,000 new PaaS customers in Q4,” said Oracle CEO, Mark Hurd. “In Fusion ERP alone, we added more than 800 new cloud customers. Today, Oracle has nearly 2,600 Fusion ERP customers in the Oracle Public Cloud — that’s ten-times more cloud ERP customers than Workday.”

“We expect that the SaaS and PaaS hyper-growth we experienced in FY16 will continue on for the next few years,” said Oracle Executive Chairman and CTO, Larry Ellison. “That gives us a fighting chance to be the first cloud company to reach $10 billion in SaaS and PaaS revenue. We’re also very excited about the availability of version 2 of Oracle’s Infrastructure as a Service (IaaS) — which will enable us to speed up the growth of our IaaS business, which customers want to buy in conjunction with our SaaS and PaaS.”

The Board of Directors also declared a quarterly cash dividend of $0.15 per share of outstanding common stock. This dividend will be paid to stockholders of record as of the close of business on July 6, 2016, with a payment date of July 27, 2016. (Original Source)

Shares of Oracle are up 1.50% to $39.22 in after-hours trading. ORCL has a 1-year high of $43.10 and a 1-year low of $33.13. The stock’s 50-day moving average is $39.53 and its 200-day moving average is $38.16.

On the ratings front, Oracle has been the subject of a number of recent research reports. In a report released today, Drexel Hamilton analyst Brian White reiterated a Buy rating on ORCL, with a price target of $51, which implies an upside of 32.0% from current levels. Separately, on the same day, D.A. Davidson’s Jack Andrews reiterated a Buy rating on the stock and has a price target of $52.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Brian White and Jack Andrews have a total average return of 8.0% and -9.9% respectively. White has a success rate of 55.3% and is ranked #138 out of 3882 analysts, while Andrews has a success rate of 32.3% and is ranked #3584.

Overall, one research analyst has rated the stock with a Sell rating, 5 research analysts have assigned a Hold rating and 10 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $45.40 which is 17.5% above where the stock opened today.