Oracle’s Q2 Guidance

While Oracle‘s ($ORCL) earnings were pretty good, their guidance for this quarter was a bit mushy. They see Q2 earnings ranging between 64 and 69 cents per share. The Street was expecting 69 cents per share. I suspect the company is being extra-conservative these days so I’m not terribly concerned about that guidance.

In the after-hours market yesterday, the stock took back its nice gain and soon fell significantly lower. Today, however, cooler heads have prevailed and Oracle is only down a bit this morning. This is from yesterday’s earnings call:

Now, to the guidance, and I want to remind you that last Q2, new license in cloud revenue increased 18% in constant currency. So this will be a very, very tough comparison. And though our pipelines and potential transactions for the quarter look really very exciting, our sales leaders remain very careful about what they are forecasting to us.

So new software license and cloud subscription revenue growth is expected to range from negative 4 to positive 6 in constant currency and negative 6 to positive 4 in reported dollars. Hardware product revenue is expected to range from negative 9% to positive 1% in constant dollars and negative 11% to negative 1% in reported dollars. As a result, total revenue growth on both GAAP and non-GAAP basis is expected to range from 1% to 4% in constant dollars and negative 1 to positive 2 in U.S. dollars.

Non-GAAP EPS is expected to be somewhere between $0.65 and $0.70 in constant dollars, $0.64 to $0.69 in reported dollars. GAAP EPS is expected to be $0.51 to $0.56 in constant dollars, and $0.50 to $0.55 in reported dollars. I want to remind you that last year, we had the benefit of a $145 million acquisition-related benefit for the Pillar earnout. So excluding that benefit, GAAP EPS last year would have been $0.51. This guidance assumes a tax rate of 23.5% and a non-GAAP tax rate of 24%. Of course, it may end up being very different.

Posted by on September 19th, 2013 at 10:46 am


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.