Oracle EPS down 50% $0.84 in Q3

Oracle Corporation (ORCL) shares plunged 6.13% in after-hours trading on worse-than-expected results. Oracle announced on Thursday, March 10, that its GAAP net income plunged a whopping 54% to $2.3 billion, or $0.84 per share, in Q3 of its fiscal 2022, missing estimates by a wide margin. Non-GAAP net income fell 11% to $3.1 billion and non-GAAP EPS declined 3% YoY to $1.13. A consensus of Wall Street analysts were expecting Oracle to earn $1.18 a share and report $10.51 billion in sales.

Total revenues rose by 4% to $10.5 billion from the same period a year earlier. Meanwhile, Oracle generated $2.4 billion in cloud-related revenue, up 24% YoY. Cloud license and on-premise license revenue came in at $1.289 billion and cloud services and license support revenue reached $7.637 billion.

"In Q3, Oracle delivered over 7% constant currency revenue growth – our highest quarterly organic revenue growth rate since we began our transition to the cloud," CEO Safra Catz stated during the conference call.

ORCL has been trading at low multiples of P/E of around 26X, but apparently elevated P/S of around 6X. Unfortunately, the company has been underperforming and underdelivering during the recent years, apparently showing a lack of a new breakthrough product and limiting itself to developing its cloud platform. However, now things can gradually change with further emphasis on HeatWave. HeatWave is an in-memory query accelerator developed for Oracle MySQL Database Service. It's a massively parallel, hybrid, columnar, query-processing engine with state-of-art algorithms for distributed query processing which provide very high performance for queries.