Shares of Oracle fell on Friday after the release of quarterly results that did not take into account earnings estimates as the database software company underwent a major shift to the cloud and shaped a new business model. That Oracle (ORCL) earnings report was released late Thursday evening.
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The company reported adjusted earnings of $1.13 per share on revenue of $10.5 billion. Analysts had expected Oracle to report adjusted earnings of $1.18 per share on revenue of $10.5 billion. Revenue grew by 4% compared to the same period last year.
Shares of Oracle fell 2.3% to 74.90 during this morning’s stock market trading. The stock is currently trading below the 50-day and 200-day moving averages.
“In the third quarter, Oracle posted consistent FX revenue growth of more than 7%, our highest quarterly organic revenue growth since we began moving to the cloud,” CEO Safra Katz said in a written commentary on Oracle’s earnings report.
Acquisition of Oracle by Cerner
In December, Oracle announced the acquisition of a medical records company. Serner (CERN) through a tender offer at a price of $95 per share, or approximately $28.3 billion in equity value. It’s Oracle’s biggest acquisition ever and pushes the database software giant even deeper into the healthcare sector.
Oracle shares hit an all-time high on Dec. 10, when the company reported fiscal second-quarter earnings that beat estimates. Revenue jumped 6% to $10.4 billion, the best growth since 2018. But Oracle shares have fallen 16% since the Cerner deal was announced Dec. 20.
“We are looking for leadership to better articulate their vision for Oracle in the healthcare vertical and discuss the way forward,” Monness Crespi Hardt analyst Brian White said in a note to clients.
Oracle stock earnings wiped out
“Oracle stock gains after a strong fiscal second quarter were more than offset by the announcement of a major acquisition that was poorly reported, leaving investors scratching their heads and dumping their stock,” White wrote. He has a buy rating on Oracle stock and a price target of 126.
Over the past few years, Oracle has moved away from the legacy business of licensing and maintaining enterprise database software. It is now a subscription-based software model that takes advantage of cloud computing.
Please follow Brian Deegon on Twitter at @IBD_BDeagon to learn more about technology stocks, analysis and financial markets.
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