How Bad Did Oracle Miss Fourth-Quarter Expectations?

Oracle Revenues by Category

Oracle Corp. (NASDAQ:ORCL) reported their fiscal 2013 fourth-quarter financial results on Thursday after the bell. Total revenues increased 2 percent on a constant-currency basis to $10.9 billion, but fell short of analyst expectations for an increase to $11.1 billion. Weak expectations — exacerbated by general selling pressure as a result of QE tapering speculation — drove the stock down 2.58 percent in the regular session, while the revenue miss contributed to a 9.4 percent post-market loss.

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Taken by category, software revenues (which account for 77 percent of total revenues) increased 5 percent. Hardware systems revenues (13 percent of total) and services revenues (10 percent of total) both declined 8 percent.

Net income increased 10 percent on the year (12 percent on a constant-currency basis) to $3.8 billion, or 35 percent of revenues. GAAP earnings per diluted share increased from $0.69 to $0.80 on the year. Non-GAAP earnings clocked in at $0.87 per diluted share. Non-GAAP earnings came in line with estimates.

“A record level non-GAAP operating margin of 47% in FY13 enabled us to generate over $14 billion in operating cash flow during the year,” commented Oracle President and CFO, Safra Catz. “We returned almost 90% of that to shareholders through dividends and share repurchases while increasing the cash on our balance sheet to $32 billion. Consistently increasing our margins, cash flow and cash balance has allowed us to double our current quarterly dividend.”

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After experiencing tremendous growth in 2012, free cash flow increased 4 percent sequentially in the fourth quarter of 2013.

Oracle Free Cash Flow

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