Oracle (ORCL) Earnings Crushes Shares

Oracle (ORCL) shares are down $1.74, or more than 4%, at $40.77, less extreme than yesterday’s 9% AH drop following the company’s Q4 earnings report that fell short of Wall Street forecasts.

Oracle saw fourth-quarter sales rise 3% year-over-year, to $11.3 billion. But profit fell 4% to $3.6 billion. Non-GAAP earnings increased 6%, to $0.92 per share with certain expenses excluded. The consensus estimate was for EPS of $0.95 on $11.48 billion in sales. Revenue off new software licenses were flat at $3.8 billion.

For the year, Oracle reported $2.87 EPS (excluding special items) and $38.3 billion in revenue. The Street was looking for $2.91 in EPS for the year on $38.45 billion in revenue.

To be fair, while Oracle’s Q4 was indeed an all-around miss, the company didn’t have a bad quarter or year. For fiscal year 2014, total revenues at the tech giant were up 3% to a record $38.3 billion. Software and Cloud revenues, a bright spot in Oracle’s results, were up 4% to $8.9 billion. GAAP Cloud SaaS and PaaS revenues were up 23% to $1.1 billion while Cloud IaaS revenues were $456 million.

Oracle officials noted that the company is making progress in selling a lot of cloud services. “Oracle is now the second largest SaaS company in the world”, said Oracle CEO Larry Ellison in a prepared statement.”We have by far the most complete portfolio of modern SaaS and PaaS products in the industry…We plan to increase our focus on the Cloud and become number one in both the SaaS and the PaaS businesses.”

At the close of Friday’s regular trading session, Oracle’s stock, which is trading at 17X fiscal 2014 earnings estimates, and more than 11.79X fiscal 2015 forecasts, has dropped back to levels not seen since the end of April 2014. The ticker however, is up 26% on the year.

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