Oracle beats EPS estimates, declares a $0.32 quarterly dividend. However, the stock price fails to capitalise on the solid momentum as market participants see soft revenue in the quarter.
On the first trading day of the week, Oracle released its Q1 FY2022 earnings. The company reported strong earnings, beating the EPS estimate by $0.06 ($1.03 vs. $0.97 expected). Moreover, it declared a quarterly dividend of $0.32 to be paid to stockholders on record on October 12, 2021.
Yet, the stock price failed to capitalise on the dividend-paying announcement and strong EPS. The reason is that revenues on the quarter grew by only 4%, seen as soft by market participants.
Oracle Q1 FY2022 Earnings Highlights
The company reported GAAP and Non-GAAP EPS higher in the quarter, by 19%, respectively 11%. In addition, it had reported an increase of 6% of its license support and cloud services, as well as $10 billion in short-term deferred revenues. Oracle’s financial position improved further – operating cash flow was up 17% in the last 12 months, reaching $15.3 billion.
The gross profit margin for the last 12 months of 80.59% is well above the 48.78% sector median, and the company has a dividend growth history of eight years. Its dividend payout ratio is 27.89%, and in the last five years, the dividend growth rate exceeded 13%.
Oracle stock price is up 37.41% YTD and 55.95% in the last 12 months. It currently trades near record-high levels.
Out of the 42 analysts that follow Oracle stock price, 20 have buy ratings, and 20 have neutral ones. The other 2 analysts have issued a sell recommendation. Oracle’s annual revenue estimates for the fiscal year ending May 2022 are $42.3 billion.