Oracle’s Q1 Results Are Better Than Street Expected, but Oh, That Guidance
The results just crossed the wires a few minutes ago, and Oracle reported per-share earnings of 59 cents versus the 56 cents that had been expected. Revenue was a little light, at $8.4 billion, a little short of the $8.48 billion that had been expected.
Shares are up in after-hours trading by more than two percent, and that’s after rising more than one percent during the regular trading session. Hardware sales continued to lag expectations, at $669 million, whereas analysts had been hoping for more sales in that category to come in at north of $700 million. Subscription software revenue rose four percent. Product support and new software revenue each rose seven percent.
The results come ahead of Oracle’s annual OpenWorld conference in San Francisco, which gets underway Sunday. The company said it will focus a lot of time on in-memory technology that will significantly speed up how Oracle databases run.
Update: Oops. Oracle shares are heading south in after-hours trading now that the company has issued guidance for the coming quarter. Oracle said on its conference call that it sees its second-quarter earnings coming in between 65 cents and 70 cents. That’s a little weak versus the consensus of 69 cents.
Worse, new software license and cloud subscription revenue growth is in the range of minus four percent to up six percent. It sees a similar picture with hardware sales: The range there is minus nine percent to up one percent. Yup, so Oracle shares are down more than four percent after hours, after rising by more than two percent initially.
The outlook for overall revenue in Q2: Down one percent to up two percent.
Here’s Oracle’s original announcement.
Oracle Reports Q1 GAAP EPS Up 14% to 47 Cents; Q1 Non-GAAP EPS Up 12% to 59 Cents
Q1 Operating Cash Flow Increases to $6.3 Billion, TTM Operating Cash Flow Increases to $14.8 Billion
REDWOOD SHORES, CA–(Marketwired – Sep 18, 2013) – Oracle Corporation (NYSE: ORCL) today announced that both fiscal 2014 Q1 GAAP and non-GAAP total revenues were up 2% to $8.4 billion. GAAP new software licenses and cloud software subscriptions revenues were up 5% to $1.7 billion while non-GAAP new software licenses and cloud software subscriptions revenues were up 4% to $1.7 billion. Both GAAP and non-GAAP software license updates and product support revenues were up 7% to $4.4 billion. Hardware systems products revenues were $669 million. GAAP operating income was flat at $2.9 billion, and GAAP operating margin was 34%. Non-GAAP operating income was up 4% to $3.7 billion, and non-GAAP operating margin was 45%. GAAP net income was up 8% to $2.2 billion, while non-GAAP net income was up 6% to $2.8 billion. GAAP earnings per share were up 14% to $0.47, while non-GAAP earnings per share were up 12% to $0.59. GAAP operating cash flow on a trailing twelve-month basis was $14.8 billion.
Without the impact of the US dollar strengthening compared to foreign currencies, Oracle’s reported Q1 GAAP earnings per share would have been up 17% and non-GAAP earnings per share would have been up 14%. GAAP and non-GAAP total revenues also would have been up 4%; GAAP new software licenses and cloud software subscriptions revenues would have been up 7% while non-GAAP new software licenses and cloud software subscriptions revenues would have been up 6%.
“Non-GAAP earnings per share increased 12% to $0.59, the best ever result for the first quarter of our fiscal year,” said Oracle President and CFO, Safra Catz. “Those record level earnings were enabled by an operating margin of 45% for the quarter. We also set a free cash flow record of over $6 billion in Q1, and then we returned half of that to our stockholders by repurchasing $3 billion of our shares in the quarter.”
“Engineered systems had its best ever Q1 in terms of unit sales, growing over 60% compared with the same quarter last year,” said Oracle President Mark Hurd. “New software license results were especially strong in the Americas, which saw 15% growth in constant currency.”
“Next week at Oracle OpenWorld, we will announce the In-Memory Option for the Oracle database,” said Oracle CEO, Larry Ellison. “Virtually every existing application that runs on top of the Oracle database will run dramatically faster by simply turning on the new In-Memory feature. Our customers don’t have to make any changes to their applications whatsoever; they simply flip on the in-memory switch, and the Oracle database immediately starts scanning data at a rate of billions or tens of billions of rows per second.”
The Board of Directors declared a quarterly cash dividend of $0.12 per share of outstanding common stock. This dividend will be paid to stockholders of record as of the close of business on October 8, 2013, with a payment date of October 29, 2013.