Oracle (ORCL) to Report Q3 Earnings: What's in the Cards?
Oracle ORCL is scheduled to release third-quarter fiscal 2023 results on Mar 9, after market close.
For third-quarter fiscal 2023, Oracle anticipates total revenue growth rate, including Cerner on a year-over-year basis, in the range of 17-19% at USD and 21-23% at constant currency (cc). The Zacks Consensus Estimate for revenues is pegged at $12.39 billion, indicating 17.9% increase on a year-over-year basis.
Oracle expects non-GAAP earnings per share) growth rate on a year-over-year basis in the range of 4-7% at cc and in the band of $1.17-$1.21 per share in USD.
The Zacks Consensus Estimate for earnings has remained steady at $1.19 per share in the past 30 days, suggesting a 5.31% increase from the year-ago fiscal quarter’s reported figure.
Over the trailing four quarters, Oracle’s earnings beat the Zacks Consensus Estimate on two occasions and missed the mark twice with the average surprise being 1.96%.
Oracle Corporation Price and EPS Surprise
Oracle Corporation price-eps-surprise | Oracle Corporation Quote
Factors to Consider
Accelerated digital transformation, along with the continuation of remote work and mainstream adoption of the hybrid/flexible work model, is likely to have driven demand for Oracle Cloud Infrastructure (OCI) services and the company’s other cloud-based applications in the to-be-reported quarter.
The acquisition of Cerner earlier in 2022, in an all-cash transaction amounting to $28.3 billion or $95 per share, is expected to bolster the company’s position in the lucrative healthcare domain. In the second quarter of fiscal 2023, Cerner contributed $1.5 billion to the total revenues driven by continued strength in the Fusion, Autonomous Database and OCI services.
For the fiscal third quarter of 2023, total cloud, including Cerner, is expected to grow from 46% to 50% in constant currency and from 43% to 47% in USD.
Continued momentum in back-office cloud-based Fusion Human Capital Management solutions, along with NetSuite Enterprise Resource Planning (ERP) and Fusion ERP applications, is expected to have favored ORCL’s quarterly performance.
On Jan 24, Oracle announced that it is introducing new logistics capabilities within Oracle Fusion Cloud Supply Chain & Manufacturing to increase the efficiency of global supply chains.
The migration of several large-scale SAP clients to Oracle Fusion ERP cloud and increasing deal wins in several verticals, especially banking and healthcare, might have acted as tailwinds for the company’s ERP business.
The robust adoption of Oracle’s next-generation Autonomous Database and Oracle Dedicated Region Cloud, supported by machine learning and Artificial Intelligence capabilities, might have benefited the top line. Autonomous Database in Gen2 public cloud infrastructure is witnessing healthy traction.
The company’s latest Multiple-VM Autonomous Database on Oracle Exadata Cloud@Customer service offering is gaining considerable traction among on-premises clients. Multiple-VM Autonomous Database enables organizations to create and run isolated, highly available Autonomous Database instances on Exadata Cloud@Customer systems that are also running non-autonomous Oracle databases.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Oracle this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.
Oracle currently holds a Zacks Rank #3 and has an Earnings ESP of -0.28%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, Ulta Beauty ULTA, Golar LNG Limited GLNG and Arhaus ARHS have the right combination of elements to post an earnings beat in their upcoming releases.
Ulta Beauty carries a Zacks Rank #2 and has an Earnings ESP of +8.53% at present. The company is slated to report fourth-quarter fiscal 2023 results on Mar 9. Its earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 26.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for ULTA’s fourth-quarter earnings stands at $5.53 per share, implying a year-over-year increase of 2.2%. It is estimated to report revenues of $3.01 billion, which suggests an increase of 10.3% from the year-ago quarter.
Golar LNG currently carries a Zacks Rank #2 and has an Earnings ESP of +2.38%. The company is expected to report fourth-quarter 2022 results on Mar 9. Its earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 73.3%.
The Zacks Consensus Estimate for GLNG’s fourth-quarter earnings is pegged at 42 cents per share, indicating a year-over-year increase of 90.9%. The consensus mark for revenues stands at $69 million, suggesting a year-over-year decrease of 40.2%.
Arhaus is slated to report fourth-quarter 2022 results on Mar 9. The company has a Zacks Rank #2 and an Earnings ESP of +1.69% at present. ARHS’ earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 112%.
The Zacks Consensus Estimate for ARHS’ fourth-quarter earnings is pegged at 20 cents per share, suggesting an increase of 42.9% from the year-ago quarter’s earnings of 14 cents. Arhaus’ quarterly revenues are estimated to increase 48.7% year over year to $354.3 million.
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