Important points from Oracle’s Q4 and full-year earnings report

Oracle Corp. (NYSE: ORCL) reported its financial results for the fiscal fourth quarter on Tuesday that beat Wall Street estimates. The stock was down about 4% in after-hours trading on Tuesday.

Q4 financial performance

Oracle said it earned $4.03 billion (£2.86 billion) in the fourth quarter or $1.37 per share. The computer software company generated $11.23 billion of sales versus the year-ago figure of $10.44 billion.

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On an adjusted basis, the American multinational earned $1.54 per share – an increase from $1.20 per share last year. According to FactSet, experts had forecast the company to post $11.02 billion of revenue in Q4 and $1.31 of earnings per share.

Dividend, share buybacks, and full-year results

Oracle declared 32 cents per share of a quarterly cash dividend on Tuesday. It repurchased $20.9 billion worth of stock in fiscal 2021.

For the full financial year, Oracle reported $40.48 billion of sales that represent a 3.6% increase from fiscal 2020. Growth rate in the recently concluded year marked the 2^nd best for the Austin-based company since fiscal 2012. The NYSE-listed company noted $14.1 billion of annual profits or $4.67 per share.

Revenue from individual business segments

Other notable figures in Oracle’s earnings report include an 8% and a 9% increase in revenue from cloud services and license support, and cloud license and on-premises license segment, respectively. Both businesses topped analysts’ estimates. Hardware revenue declined 2% to meet FactSet consensus, and second-generation cloud infrastructure noted a 100% increase in quarterly revenue.

Guidance for fiscal Q1

For the fiscal first quarter, CEO Safra Catz now forecasts up to 98 cents of adjusted EPS and a 3% to 5% growth in revenue. Analysts, on the other hand, are calling for $1.03 of adjusted per-share earnings on a 3% growth in revenue.

JPMorgan analysts’ comments

Questioning Oracle’s potential to continue to appreciate in the stock market, JPMorgan analysts said:

“A good chunk of the value-rotation uplift has now played out. Our checks do support the potential for Oracle to displace some very large competitor ERP footprints, and the $5 EPS threshold is drawing nearer as a favourable milestone, but with much less dry powder for exercising share buybacks, growing earnings will become a different challenge in the future because it must be driven relatively more by core operations.”

JPMorgan rates Oracle at ‘overweight’ at the moment with a price target of $73 per share. Oracle’s earnings had surged close to 100% in the prior quarter (Q3).