After the closing bell yesterday, software giant Oracle (ORCL – Free Report) reported fiscal first-quarter 2019 results. While the company beat the Zacks Consensus Estimate for earnings, it lagged on revenues and disappointed investors with a bleak outlook.
Oracle Q1 Earnings in Focus
Earnings per share came in at 71 cents, three cents ahead of the Zacks Consensus Estimate and up 18% year over year. Revenues inched up 1% year over year to $9.20 billion but were below the estimated $9.28 billion.
Revenues from Cloud services and license support rose just 3% to $6.6 billion and accounted for 72% of total revenues.
For the fiscal second quarter, the world’s second-largest software maker expects total revenues to grow 0-2% on a constant currency basis, below the Zacks Consensus Estimate of 2.35% growth. Further, the company expects earnings per share of 78-80 cents; the mid-point is also below the Zacks Consensus Estimate of 80 cents, reflecting some concerns in the company’s future growth.
Revenue miss and disappointing outlook pushed shares of Oracle down as much as nearly 5% in aftermarket trade with elevated volumes. Currently, the stock has a Zacks Rank #4 (Sell) and a VGM Score of C. It belongs to the top-ranked Zacks Industry (top 20%).
ETFs in Focus
ETFs with the highest allocation to this software giant, look to be big movers this week and in the next, as investors digest its scores and views. They should closely monitor the movement in these funds and grab any opportunity from a surge in the price of ORCL or avoid if the stocks drag them down:
iShares North American Tech-Software ETF (IGV – Free Report)
This ETF provides exposure to the software segment of the broader U.S. technology space by tracking the S&P North American Technology-Software Index. The fund holds a basket of 64 securities with Oracle taking the fourth spot at 7.96% of total assets. It is popular with AUM of $2.2 billion and volume is good as it exchanges nearly 305,000 shares a day. The product charges 47 bps in annual fees and has a Zacks ETF Rank #2 (Buy), with a High-risk outlook.
