After posting some after-trading gains on its earnings, Oracle quickly receded this morning after CNBC reported that the company’s guidance for the next quarter would be below expectations.
In terms of guidance, the company expects to bring in 64-68 cents in earnings per share and 2-4 percent revenue growth — with 39-42 percent cloud revenue growth — in constant currency for the second quarter of the 2018 fiscal year. Analysts were expecting 68 cents in earnings per share on $9.49 billion in revenue, according to Thomson Reuters. Immediately after Oracle CEO Safra Catz gave the guidance, the company’s stock fell more than 5 percent below the closing price of $52.79 per share.
While these numbers may fall short of expectations, investors may be asking themselves if the stock itself is a worthy investment. Pressure has never been higher for Oracle executives than it is now. Senior executives will only receive options if the company “significantly grows its cloud business.” With their own money at stake, the directors of the company will likely work hard to correct their predictions for next quarter.
Oracle has been a solid investment for some time so jumping ship may not be the call. Stay up to date with the situation by following us on Facebook at Smart Money Press.
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