Oracle shares tumble, all-sessions, on poor forecasts
Sticky inflation and high borrowing costs have forced many companies to cut back on expenditure and Oracle says this is impacting demand for its cloud offerings.
Oracle forecast total revenue growth to be in the range of 6%-8%, below analysts' average estimates for growth of about 7.6%. For its fourth quarter, Oracle reported adjusted earnings of $1.34 per share, marginally beating estimates. Quarterly revenue rose 4% to $12.94 billion, below analysts' average estimate of $13.05bn. Excluding Cerner, the health care business Oracle acquired last year, revenue rose 6%.
(AI Video Transcript)
Oracle
Shares of Oracle a technology company, had a big drop after the regular trading hours. This happened because people were worried about inflation and high borrowing costs affecting Oracle's spending. They were also concerned that this might reduce the demand for Oracle's cloud services. The company said that its total revenue growth would be 6 to 8% lower than what analysts predicted. In the fourth quarter, Oracle made a profit of $1.34 per share, which was a little better than expected.
Oracle's stock prices
However, their revenue for the second quarter was only 4% higher, reaching $12.94 billion. This was lower than the estimated $13.05 billion. When you don't include the revenue from a healthcare company Oracle bought the previous year, the revenue increase was 6%. There was a chart showing the movement of Oracle's stock prices after regular trading hours, and it showed a big decrease. Experts think this trend will continue when the stock market opens the next day.
Overall, Oracle's shares had been doing well in 2023, with a 27% increase. But this recent setback has probably affected Larry Ellison, one of the co-founders and the chairman of Oracle. To sum it up, Oracle's shares had a big drop in after-hours trading due to concerns about inflation and high borrowing costs. Analysts are worried that the demand for Oracle's cloud services may go down. Even though Oracle's profit in the fourth quarter was a bit better than expected, their revenue increase fell short of estimates. This caused a big drop in the company's stock value, which is expected to continue at the start of the trading day.
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