Oracle Corp. shares recovered from a drop in the extended session Thursday after Wall Street forecasts for the fourth quarter fell within the database-software company’s headwinds-challenged outlook range.
shares, which had dropped as much as 8% after hours, recovered and were up 0.5% in the extended session following Oracle’s forecast. The share moves followed a 0.7% rise in the regular session to close at $ 76.65.
On the call with analysts, Oracle Chief Executive Safra Catz said the forecast assumes that the company’s $ 28.3 billion deal to acquire Cerner Corp. CERN,
does not close in the fourth quarter and that exchange rates do not change. The company expects a currency headwind of 2% to 3% on revenue.
Catz forecast fourth-quarter earnings of $ 1.35 to $ 1.39 a share on revenue growth of 3% to 5%, or $ 11.56 billion to $ 11.79 billion. Analysts surveyed by FactSet are forecasting $ 1.38 a share on revenue of $ 11.75 billion.
“Both non-GAAP and GAAP EPS are expected to decline year-over-year due to some large investment gains we saw last year, as well as a very low tax rate last year,” Catz said on the call. “It was 10.7%. Both of these mask the strong earnings growth and momentum we continue to see out of our core cloud business. ” Catz said the tax rate for the most recent results was 18.4%.
For the fiscal third quarter, Oracle reported net income of $ 2.32 billion, or 84 cents a share, compared to $ 5.02 billion, or $ 1.68 a share, a year ago.
Adjusted earnings, which exclude stock-based compensation expenses and other items, were $ 1.13 a share, compared to $ 1.16 a share in the year-ago period.
Revenue rose to $ 10.51 billion from $ 10.09 billion in the year-ago quarter.
Analysts had estimated earnings of $ 1.18 a share – based on Oracle’s forecast of $ 1.14 to $ 1.18 a share – and revenue of $ 10.51 billion.
Oracle shares are up 6% over the past 12 months, versus a 5% decline by the iShares Expanded Tech-Software Sector ETF IGV,
while the S&P 500 index SPX,
has gained 9% and the tech-heavy Nasdaq Composite Index COMP,
is virtually flat.