Oracle Slips Over 5% As 3Q Revenue Growth Misses Management’s Forecast
Oracle announced better-than-expected 3Q results on Wednesday. However, shares of the cloud applications and platform services provider fell 5.3% in the extended trading session as 3Q revenue growth at constant currency fell short of management’s guidance range.
Oracle (ORCL) posted revenues of $10.09 billion for 3Q, which came in ahead of the Street’s estimates of $10.07 billion. However, sales were flat on a constant currency basis and missed the company’s growth projection of 1%-3%.
The company’s adjusted EPS surged 20% to $1.16 year-over-year and topped the consensus estimates of $1.11.
Additionally, Oracle announced that it has increased the share repurchase authorization by $20 billion. (See Oracle stock analysis on TipRanks)
Furthermore, Oracle hiked its quarterly cash dividend by 33% to $0.32 per share, reflecting an annualized yield of approximately 1.8%. The newly declared dividend will be payable on Apr. 22 to shareholders of record as of Apr. 8.
Ahead of the earnings release, Monness analyst Brian White reiterated his Buy rating and price target of $82 (13.7% upside potential) on the stock. In a note to investors, White wrote, “We believe Oracle offers investors a high-quality, value play with the opportunity to capitalize on the company’s cloud transformation and increasingly attractive model.”
Overall, the rest of the Street has a cautiously optimistic outlook on the stock, with a Moderate Buy consensus rating based on 6 Buys, 7 Holds and 1 Sell. The average analyst price target of $72 implies downside potential of 0.2% to current levels. ORCL has gained about 48.5% over the past year.
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