Oracle Shares Drop On the Back of Disappointing Financial Results

After the closing bell on Thursday, Oracle Corporation (NYSE:ORCL) has reported its financial results for the fourth quarter and the full fiscal year 2014. According to the statement, the company has reported EPS of $0.80 per diluted share for the fourth quarter, flat on the year, and missing the estimates by a big margin, the consensus estimates standing at $0.95.

For the full year, the earnings of Oracle amounted to $2.38 per diluted share, above from $2.26 reported for the previous fiscal year. The full year EPS, however, also missed the analysts’ estimates of some $2.90 per share. On the revenue side, the company reported revenues worth $11.32 billion for the fourth quarter and $38.28 billion for the full fiscal year, also lower in comparison with estimates of $11.50 billion and $38.40 billion respectively. In its fiscal year 2013, Oracle’s revenues amounted to $10.95 billion in the fourth quarter and $37.18 billion for the full year.

In this way, Oracle has reported pretty disappointing results and the market reaction was imminent. In the aftermarket trading, the stock price of Oracle dropped by over 6.00% and keeps falling, after closing 0.70% in red at $40.00 per share. The year-to-date return of Oracle amounts to over 11%.

Nevertheless, there is some positive news. As the company’s CEO, Larry Ellison pointed out, Oracle has become the second largest company in ‘Software as a Service’ (SaaS).

“In SaaS, we’re in front of everybody but salesforce.com. In IaaS we’re larger and more profitable than Rackspace. We have by far the most complete portfolio of modern SaaS and PaaS products in the industry: CRM: Sales, Service & Marketing; HCM: HR, Payroll & Talent; ERP: Accounting, Procurement, Supply Chain & more. All these SaaS products run on the world’s most powerful PaaS: the Oracle in-memory multitenant database and Java. We plan to increase our focus on the Cloud and become number one in both the SaaS and the PaaS businesses,” Oracle quoted Mr. Ellison as saying.

In addition, the company revealed that its Board of Directors has declared a quarterly cash dividend of $0.12 per share on its common stock.

Among the shareholders of Oracle is Natixis Global Asset Management‘ Harris Associates, which owns over 68.46 million shares as of the end of the first quarter, followed by Boykin Curry‘s Eagle Capital Management with 45.47 million shares. Both investors have allocated over 5% of their equity portfolios for Oracle stock.

Disclosure: none