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Oracle shares spike despite FQ4 earnings miss

Wednesday, June 12, 2024

Today’s headlines

What’s happening: Shares of Oracle Corporation surged during the after-hours trading session on Tuesday, following the release of the company’s fiscal fourth quarter results.

What happened: The software maker’s stock rose sharply in extended trading, despite weaker-than-expected quarterly sales and earnings.

Investors responded to Oracle’s strong revenue outlook for fiscal 2025 and new partnership with OpenAI and Google Cloud.

How were the results: The Austin, Texas-based company reported a low single-digit increase in sales for its fiscal fourth quarter.

  • Revenues grew by 3.35% year-over-year to $14.3 billion, missing the consensus estimates of $14.554 billion.
  • Adjusted earnings came in at $1.63 per share, below Wall Street expectations of $1.65 per share.

Why it matters: Oracle saw strength in demand for its AI infrastructure and signed more than 30 AI sales contracts during the latest quarter, cumulatively surpassing $12.5 billion. This included a contract with Open AI.

“In Q3 and Q4, Oracle signed the largest sales contracts in our history — driven by enormous demand for training AI large language models in the Oracle Cloud,” CEO Safra Catz said during the earnings call.

The company also reported a partnership with Alphabet to integrate its cloud with Google Cloud.

“Oracle and Google Cloud have many joint enterprise customers. This new partnership will help these customers use Oracle database and applications in concert with Google Cloud’s innovative platform and AI capabilities,” Alphabet CEO Sundar Pichai said.

The company said its RPOs (remaining performance obligations) came at $98 billion in the quarter, representing a 44% year-over-year surge. Total cloud revenues grew by 20%, while cloud infrastructure revenues climbed 42%. Cloud application revenues grew 10%, Fusion cloud revenues rose 14% and NetSuite Cloud ERP revenues jumped 19%.

Its board declared a quarterly cash dividend of 40 cents per share. The company also said it sees revenue growth between 5% and 7% in the first quarter.

How shares responded: Oracle’s shares jumped 9.5% to $135.60 in extended trading hours following the release of quarterly results on Tuesday. The stock has added around 23% over the past six months.

What to watch: Investors will continue monitoring AI investments by companies and the demand for Oracle’s AI-powered cloud services.

The markets today

The British pound will be in focus ahead of a basket of major economic reports

Context: The sterling recorded gains on Tuesday, with the GBP/EUR forex pair surging to a 22-month high.

Details: The British pound continued its advance on Tuesday, hitting a 22-month high against the euro after recording sharp gains in the prior session. The euro came under pressure on Monday following the results of the European Parliament elections. French President Emmanuel Macron had called a snap parliamentary election after significant gains were made by the far right in a European Union vote.

Investors also assessed UK’s economic data, with the labour market showing signs of further cooling in April following an increase in the unemployment rate. The UK’s unemployment rate rose to 4.4% in the three months to April, from a reading of 4.3% in the prior three-month period. With this, the figure climbed to a two-and-a-half year high. Average weekly earnings, including bonuses, rose 5.9% year-over-year to £687 per week from February to April, same as in the earlier period, but above market estimates of 5.7%.

The GBP/EUR forex pair gained around 0.3% to 84.31 on Tuesday, notching its strongest level since August 2022. The GBP/USD forex pair rose around 0.1% to 1.2741.

What to watch: Investors await the release of economic data on GDP growth rate, industrial production and balance of trade from the UK today. The country’s GDP, which grew by 0.7% year-over-year in March, is expected to expand by 0.6% in April.

Analysts expect industrial production in the UK to decline 0.1% year-over-month in April, following March’s 0.2% growth. The UK’s trade deficit, which shrank to £1.098 billion in March, is projected to expand to £1.25 billion in April.

Other Markets: US trading indices closed mixed on Tuesday, with the S&P 500 and Nasdaq 100 up by 0.27% and 0.71%, respectively, and the Dow Jones index down by 0.31%.

The news shaping the markets

The Ukrainian military named Vadym Sukharevskyi as Commander of the Unmanned Systems Forces of the Armed Forces. The news sent the RUB/USD pair lower in forex trading this morning.


Japan’s producer prices increased 2.4% year-over-year in May, accelerating from a 1.1% rise in the prior month, which exerted pressure on the JPY/USD forex pair.


South Korea’s unemployment rate came in unchanged at 2.8% in May. However, the number of unemployed individuals rising 12.3% year-over-year to 884,000 sent the KRW/USD pair lower in forex trading this morning.


Brazil’s annual inflation rate accelerated to 3.93% in May, from 3.69% in the previous month. The latest reading also came in higher than market estimates of 3.89%, exerting pressure on the BRL/USD forex pair.


The American Petroleum Institute said US crude oil inventories fell by 2.428 million barrels in the week ending April 7, compared to an increase of 4.052 million barrels a week ago, which sent the WTI crude oil prices higher this morning.

What else to watch today

UK’s goods trade balance, manufacturing production  and construction output, US MBA mortgage applications, consumer prices, crude oil stocks change, gasoline stocks change, distillate stocks, government budget and Federal Reserve’s interest rate decision, India’s money supply M3, industrial output, retail inflation rate and manufacturing production, Germany’s current account, China’s vehicle sales, as well as Turkey’s total motor vehicles production and total vehicle sales.


Site by Pink Green
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