Tag Archives: Oracle

Office 365 and Azure cloud-computing made Microsoft a winner and investors sent the stock up over 50% last year

Microsoft is expected to report earnings on Wednesday 29, and along with Apple, Amazon and Facebook, their earnings can make or break the stock market. Apple has gone straight up since January last year, followed by the Space X equity Tesla. Rocket-shared both of them.

Now, its time for Microsoft with shares risen nearly 20% since their last report on October last year. That`s more than twice as much as the S&P 500 which is impressive for that tech giant. Wall Street analysts predict that Microsoft will report $35,7 billion of revenue and earnings of $1,32 per share.

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Microsoft continue to benefit from their cloud business and in addition they have $20 billion annual buybacks/dividends. This is a major reason why they outperformed the market last year. Office 365 and Azure cloud-computing made the stock a winner and investors sent the stock up over 50% last year.

Consensus revenue estimate would represent 9,8% growth compared to the same quarter a year ago. Windows, search ads, Surface and gaming boosted the company`s revenue with $11,13 billion. Cloud computing service Azure and Windows Server, SQL Server, System Center, GitHub and consulting saw $10,85 billion in revenue.

Research firm CFRA estimates that revenue from cloud-based services hit 50% of total revenue in the company`s fiscal Q4, and investors are postive to Microsoft at the moment. The company changed its strategy and are competetive to Amazon in the cloud sector as well.

The stock declined to $162,28 per share on Tuesday, down -1,67%, but Microsoft is the most valuable U.S company after Apple which is number one on the list. Microsoft`s valuation after the drop on Tuesday is $1,24 trillion, while Apple is valued at $1,35 trillion.

Microsfot signed a military cloud contract with Pentagon worth $10 billion. They won the contract in October last year after a long battle with its competitors like Amazon, Oracle and IBM. Earnings strength is very strong and looks good for future earnings growth.

Microsoft is expected to report earnings on Wednesday 29 after the market close.

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Oracle can be in the midst of a tectonic shift to the Cloud

Microsoft acquired LinkedIn for $196 per share, and this will not be the last deal in the tech industry I think. The M&A will continue, but who are in the position to push the M&A activity any further?

Blue chips are. So are Oracle Corporation which is scheduled to report fourth quarter of fiscal 2016 earnings results on Thursday, June 16. The company have had a lot of problems lately but what can we expect now?

 

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Oracle lost its high-profile copyright fight with Google, and they are named in a $3 billion suit by the former HP Enterprise. Hewlett-Packard claims Oracle «breached a clear contractual obligation to HP and acted in bad faith, with the intention of driving hardware sees from HPs Itanium to Oracles sun servers.»

The two used to be business partners but a split deepened when Oracle Corporation acquired HP rival Sun Microsystems and later hired HP ex Mark Hurd as co-president. On top of that; former senior finance manager is suing, saying she was terminated in relation over complaints about accounting practices in its cloud services business.

Management pushed Svetlana Blackburn to «fit square data into round holes» to make the business look better, she claims. The stock have been declining since 2014, but BofA/Merrill Lynch views the quarter as a turning point in the cloud segment.

The cloud business is still «only» 6,5 percent of total revenue, but this business segment is growing. The stock price look undervalued with the price just below $40, and many investors are waiting for the stock price to breakout from its consolidation between $35 – $45.

Oracle is the world`s largest provider of enterprise software and a leading provider of computer hardware products and services. Oracle the database software giant in the midst of a tectonic shift to the Cloud.

Cloud is beginning to come into play. Last quarterly results authorized cloud transition with step-like increases in Software-as-a-Service (SaaS) and Platform-as-a-Service (PaaS) sales growth rates. It`s difficult to see how their gross profit can decline as their SaaS/PaaS revenues probably will increase in fiscal year 2017.

Oracle is coming off a better than expected third quarter in which they beat on the bottom line but missed sales estimates. The continued transition from licensing, where revenues are booked upfront, to a cloud subscription model, where it is realized month to month, will hurt top line growth as witnessed this past quarter.

Oracle enjoys a leading position in enterprise and database management systems. They are also gaining ground in the rapidly growing cloud sector, which is one of the fastest growing sectors in technology and that has without doubt benefitted Oracle.

Its expected to see an earnings of $0,82 per share on $10,5 billion in revenue, and thats one penny higher than Wall Street on the bottom line and in-line on the top. YoY comparisons are now projecting a 5% increase in profitability with sales actually decreasing 2%.

Oracle reports on Thursday, June 16.

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