Oracle Earnings Rebound to Second Best Ever!

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Oracle reported QE May 2017 financial results on June 21

Summary

• Oracle reported an exceptional earnings beat of $0.89 EPS, a YoY increase of +10%.
• Total revenues were a strong $10.89 billion, a YoY increase of +3%.
• ORCL stock has been in an long-term uptrend and is about +33% YTD 2017 and +25% for the past 12 months.

Has Oracle Reversed the Financial Downtrend with Cloud Hyper-Growth?

Oracle (ORCL) earnings per share for the quarter ending May 31, 2017 were the second best ever. CEOs Mark Hurd and Safra Catz reported a large surprise earnings beat with an exceptional quarter including a YoY increase in Non-GAAP earnings per share (+10%) and a YoY increase in revenues (+3%). The analysts had estimated -3.7% and -1.4% while the Oracle management outlook was -1.2% and +0.5%, respectively.

“Our fourth quarter results were very strong as revenue growth and earnings per share both substantially exceeded the high end of guidance. We continue to experience rapid adoption of the Oracle Cloud led by the 75% growth in our SaaS business in Q4. This cloud hyper-growth is expanding our operating margins, and we expect earnings per share growth to accelerate in fiscal 2018.”, said CFO Safra Catz.

I continue to consider ORCL a Hold and but now have a Positive outlook on Oracle’s future financial performance. This was a decisive reversal of the financial downtrend, but the QE May 2014 remains the financial pinnacle to be exceeded.

Earnings per Share

The Non-GAAP earnings per share of $0.89 was a beat over the $0.78 projected by analysts and was well above the prior four-quarter average of $0.69. This was the second highest earnings per share ever recorded.

What is the Oracle Management Guidance for next quarter?

Estimated QE August 2017 Earnings per Share (Non-GAAP):

1. ORCL Average Estimate: $0.60
2. Prior Year $0.55 = +9% YoY
3. Prior Quarter $0.89 = -33% QoQ

Earnings per Share Year Over Year Growth Rate (%)

The Non-GAAP EPS was an impressive +9.88% increase year over year, from $0.81 to $0.89. This was the largest increase since the QE August 2013 (+11.32%)! Oracle management is projecting a year over year growth rate of +9.09% for next QE August 2017, which would be a slight slowing. This trend is still a vast improvement over the downtrend from the QE November 2014 through the QE November 2016.

Revenues

Total Non-GAAP Revenues were an encouraging, and annual cyclical peak, of $10.94 billion and a beat over the $10.45 billion projected by the analysts. Prior year QE May 2016 was $10.60 billion.

What is the Oracle Management Guidance for next quarter?
Estimated QE August 2017 Total Revenues (Non-GAAP):

1. ORCL Average Estimate: $9.03B
2. Prior Year $8.60B = +5% YoY
3. Prior Quarter $10.89B = -17% QoQ

Conclusion

Financial Performance: Non-GAAP and GAAP financial performance had slowed from both a cyclical peak and a pinnacle for the QE May 2014. At that time, Non-GAAP EPS was $0.92 and total revenues were $11.33 billion. By comparison, this QE May 2017 was $0.89 and $10.89 billion. This latest quarter, and the management estimates for next quarter, indicate financial performance is improving.

Financial Position: Capital and working capital are adequate. Total assets of $135 billion is a record high. The current assets to total assets ratio is 53%, so there is liquidity. The total debt ratio, both short-term and long-term, is a very high at 43% of total assets and has been at this higher level for a couple of years.

Pivot to the Cloud: Co-CEO Safra Catz has clearly indicated that the cloud is the future for Oracle. She also stated in the Q3 2017 earnings call, “Next year I expect our cloud revenue will be larger than our new software licensing revenue. The investments we’ve made to transition our business to the cloud has been important to ensure Oracle remains a technology leader and we’re now beginning to see the benefits in our results.”

Earnings Returned to Shareholders: Oracle is paying a record-high dividend of $0.19. At a selected benchmark $50.00 stock price this is a 1.52% annualized yield. Oracle repurchased $494 million of common stock in the QE May 2017. These repurchases combined with the $787M dividends equal $1.281B earnings returned to shareholders.

Stock Price: ORCL stock has been in a long-term upward trend. ORCL has price support from the dividends paid, dividend yield, stock repurchases, and institutional buyers.

Stock Evaluation and Opinion: As an intermediate-term to long-term investor, and from that perspective, I continue to consider Oracle stock to be a Hold, compared to Buy or Sell. I am now Positive on Oracle stock, compared to previously being Neutral. Long-term will hopefully have better prospects, but that has not been completely proven yet. The quarters ending in May are the annual cyclical peaks for top line revenues and bottom line earning per share. The pinnacle of these financial performance indicators was reached for the QE May 2014 and has not been regained since.

(Graphs created by author using data from Oracle. Time frames generally are intermediate-term = 1-3 months and long-term = 3+ months for purposes of the above discussion.)

About Oracle

Oracle offers a comprehensive and fully integrated stack of cloud applications and platform services. For more information about Oracle (NYSE: ORCL), visit www.oracle.com or contact Investor Relations at investor_us@oracle.com or (650) 506-4073.

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Can Oracle Reverse Its Earnings Downtrend?

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Oracle reports QE May 2017 financial results on June 21

Can Oracle Reverse Its Earnings Downtrend?

Summary

• Earnings estimates are an average of $0.78 per share by the analysts and $0.80 by Oracle management. This is a -3.7% and -1.2% YoY decrease, respectively.
• A small YoY decrease in revenues (-1.4%) is projected by the analysts from $10.60 billion to $10.45 billion.
• ORCL stock has been in a long-term uptrend and is up about 17+% for both 2017 YTD and the past 12 months.

Read more analysis and see the financial charts at Seeking Alpha!

About Oracle

Oracle offers a comprehensive and fully integrated stack of cloud applications and platform services. For more information about Oracle (NYSE: ORCL), visit www.oracle.com/investor or contact Investor Relations at investor_us@oracle.com or (650) 506-4073.

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Largest USA Tech Companies Earnings Soften: Apple Dominates, HP Plunges

This is the technology sector reported financial performance going into the October earnings season.

Quarterly Net Income

The Largest USA Tech Companies have reported quarterly aggregate net income of $14.8 billion, which is lower than the prior quarter $35.6 billion. This is a sequential QoQ decrease of -$20.8 billion and -58%! What happened? HP reported an epic quarterly net loss of -$8.9 billion, which offset the Apple quarterly net income of +$8.8 billion. Microsoft reported a rare quarterly net loss of -$492 million. Eight of the eleven companies reviewed reported a QoQ decrease in net income.

A net decrease is not unusual or unexpected as summer is typically a slower financial performance on an annual cyclical basis for the tech sector. But the huge HP and extraordinary Microsoft net losses created a plunge. The only three sequential QoQ increases were IBM (+$816 million) and Intel (+$89 million) and EMC (+$63 million).

For the latest quarters reported, Apple continues dominating with an incredible $8.82 billion quarterly net income. Second was IBM at $3.88 billion, third was Intel at $2.83 billion, and fourth was Google with $2.79 billion. Apple earned more than #2 IBM and #3 Intel combined.

The rest of the pack follows with #5 Oracle at $2.03 billion, #6 Cisco at $1.92 billion, #7 Qualcomm at $1.02 billion rounding out the Billion Dollar Club. Trailing are #8 EMC at $689 million and #9 Amazon at a mere $7 million. Further behind are #10 Microsoft at a dismal net loss of -$492 million and #11 HP with the aforementioned epic loss of -$8.86 billion. Apple comprises approximately 60% of the total quarterly net income of the 10 tech companies listed!



Return on Assets

The Largest USA Tech Companies have reported an average return on assets of +12.29%, a multi-quarter low and -1.68% decrease from the prior quarter. Seven of the eleven companies reviewed reported decreases. The largest sequential QoQ decreases were HP (-8.564%), Microsoft (-6.42%), and Apple (-2.08%). The only significant sequential QoQ increase was Cisco (+0.65).

For the latest quarters reported, Best of Breed goes to Apple with a commanding and incredible lead of at +29.70% ROA. Apple is distantly followed by Intel (+17.61%), Qualcomm (+15.26%), and Google (+15.02%), and Microsoft (+14.95%). Next are #6 IBM (+14.30%), and #7 Oracle (+13.53%).

Significantly lagging the field are #8 Cisco at +9.01% and #9 EMC at +8.42%. Amazon is #10 and a much lower +1.82%. Finally, HP is last and #11 at a negative -4.44%.



I have included Amazon because of the Kindle Fire, streaming, cloud services, and the resulting competition with others listed.

Status Updated through Oracle quarterly financial results reported 9-20-12
Next reports: October earnings season

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Big Tech Assets Rise, Apple Reaches Record $163 Billion

This is the technology sector reported financial position going into the October earnings season.

Total Assets

The Largest USA Tech Companies have reported all-time high aggregate total assets of $940 billion. This is a net increase of +$14 billion and +1.6% from the prior quarter. Apple led the way, and continues pulling away, with another incredible +$11.9 billion quarterly increase, followed by Google (+$8.9 billion), and Microsoft (+$3.3 billion). A huge decrease was reported by HP (-$10.1 billion), followed by Oracle (-$1.8 billion), and IBM (-$1.5 billion).

The $100 Billion Club: For the latest quarter reported, Apple continues #1 and largest at $162.9 billion. Microsoft moved up to #2 at $121.3 billion while HP slipped to third at $117.6 billion. IBM continues at #4 with $113.8 billion. Cisco is #5 at $91.8 billion.

The next group is #6 Google at $86.1 billion, #7 Oracle ($76.6 billion), and #8 Intel ($72.4 billion). Qualcomm and EMC are a more distance #9 and #10 at $42.4 billion and $35.0 billion, respectively. Amazon is last and #11 at $21.0 billion. I have included Amazon because of the Kindle Fire, streaming, cloud services, and the resulting competition with others listed.



Capital Ratio

The Largest USA Tech Companies have reported an average capital to assets ratio of 54.53%, a slight decrease of -0.85% from the prior quarter. Six of the eleven companies reviewed reported increases, led by Intel (+2.3%) and followed by EMC (+0.85%) and Oracle (+0.84%). Google and Microsoft reported the largest decreases at -4.79% and -3.46%, respectively.

For the latest quarters reported, Qualcomm (77%) continues leading Google (75%) to have the strongest capital position. Apple is #3 at 69%, followed closely by Intel at 67%. Next are EMC, Cisco, Oracle, and Microsoft at 63%, 57%, 56%, and 55%, respectively. Amazon is 9th at 36%, followed by HP (27%) and finally IBM (18%) is last and #11.



Status
Updated through Oracle quarterly financial results reported 9-20-12
Next reports: October earnings season

Earnings Reviews

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Oracle Earnings Review: EPS Strengthens, Revenues Weaken, Outlook Stable

Oracle reported QE August 2012 financial results on September 20

Due to Oracle's very cyclical quarterly results, the year over year (YoY) results are the way of keeping score. The score is mixed from this latest quarterly report.

The GAAP earnings per share of $0.41 was an encouraging +13.89% YoY, compared to +11.29% YoY last quarter, which was a 9-quarter low. The downtrend was reversed. The problem is the GAAP EPS outlook for next QE November 2012 of $0.45 to $0.49 or +4.65% YoY to +13.95% YoY. The downtrend will either redevelop or Oracle treads water in a best case scenario. However, the Fed's quantitative easing might just save the day when earnings are reported in December on a weaker US Dollar.

Total revenues were a disappointment, down -2.30% YoY and projected for QE November 2012 at +0% to +5% QoQ.



Strengthening US Dollar: Oracle should benefit next quarter from the Federal Reserve's infinite quantitative easing. For the QE August 2012, "Without the impact of the US dollar strengthening compared to foreign currencies, Oracle’s reported Q1 GAAP earnings per share would have been $0.03 higher at $0.44, up 24%, and Q1 non-GAAP earnings per share would have been $0.03 higher at $0.56, up 17%. Both GAAP and non-GAAP total revenues also would have been up 3%, GAAP new software licenses and cloud software subscriptions revenues would have been up 10%, non-GAAP new software licenses and cloud software subscriptions revenues would have been up 11% and both GAAP and non-GAAP hardware systems products revenues would have been down 21%."

The long-term trend is clearly upwards as evidenced by the GAAP EPS chart below. However, the strength of the uptrend is weakening. The biggest performance concern is the flat to decreasing YoY growth rates in total revenues and perhaps a resumption of slowing YoY growth rates in earnings per share.

The biggest financial position negative has been the debt. This is now 19% of total assets and at a multi-year low, down from a peak of 26% for the QE August 2010. Financial position continues acceptable with adequate capital, moderate debt, strong liquidity, and an increasing return on assets. Stock repurchasing and dividends are a plus.

GAAP Quarterly Financial Result, QoQ Change, YoY Change
Total Assets: $76.56 billion, -2%, +4%
Revenues: $8.18 billion, -25%, -2%
Net Income: $2.03 billion, -41%, +11%
Earnings per Share: $0.41, -41%, +14%
Cash Flow per Share $1.15
1-Year Return on Assets +13.53%

Oracle Outlook QE November 2012
GAAP and Non-GAAP Total Revenues +0% to +4%
QoQ Non-GAAP EPS of $0.59 to $0.63 = $0.61 avg = +15% QoQ, +13% YoY
GAAP EPS $0.45 to $0.49 = $0.47 avg = +15% QoQ, +9% YoY













Oracle Cloud: "A little more than a week from now we will announce lots of enhancements to the Oracle Cloud," said Oracle CEO, Larry Ellison. "There are more CRM, ERP and HCM applications as a service, and more Oracle database, Java and social network platform services. Our new infrastructure as a service is available in the Oracle Cloud and as a private cloud in our customers’ data center, with the nique ability to move applications and services back and forth between the two. Join us at Oracle OpenWorld for all the details."

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Big Tech Profits Soften: HP, Microsoft, Amazon Plunge!

Net Income: Quarter over Quarter Change

The Largest USA Tech Companies reported softening profits from the prior quarter, which is not unusual this time of year on an annual cyclical basis. Only 3 of the 10 companies reviewed reported sequential quarterly increases (Oracle, IBM, Intel).

First, HP is not included in the chart below. HP, which is among the walking wounded, reported a disastrous quarter and a chart-busting -656% decrease in net income QoQ. HP reported a net loss of -$8.86 billion for their latest quarter, compared to net income of +$1.59 billion in the prior quarter. Including HP skews the chart and obscures the data.

Reporting net income increases quarter over quarter were Oracle (+38%), IBM (+27%), and Intel (+3%). Reporting a decrease in net income from the prior quarter were Google (-4%), Cisco (-11%), Apple (-24%), and Qualcomm (-46%). The Big Losers were Amazon (-95%), Microsoft (-110%), and the aforementioned HP (-656%). The second calendar quarter is typically slower and a quarterly drop for many tech companies in total revenues, net income, and earnings per share.



Net Income: Year over Year Change

The Largest USA Tech Companies reported more positive results from the prior year, compared to the prior quarter. 6 of the 10 companies reviewed reported YoY increases. Cisco (+56%) and Apple (+21%) led the way, followed by Qualcomm (+17%), Google (+11%),  Oracle (+8%), and IBM (+6%). The remainder lost ground and some lost huge territory. Intel (-4%), Amazon (-96%), Microsoft (-108%), and HP (-560%) reported decreases year over year.

HP is not included in the chart below. Including HP skews the chart and obscures the data.



Updated through HP quarterly financial results reported 8-22-12
Next reporting: Oracle in September

Big Tech Assets Rise, Apple Reaches Record $163 Billion

Largest USA Tech Companies Earnings Plunge, But Apple Still Dominates

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Big Tech Assets Rise, Apple Reaches Record $163 Billion

Total Assets

The Largest USA Tech Companies have reported all-time high aggregate total assets of $917 billion. This is a net increase of +$32 billion and +4% from the prior quarter. Apple led the way, and continues pulling away, with another incredible +$12 billion quarterly increase, followed by Google (+$9 billion), and Oracle (+$4 billion). The only decrease was reported by IBM (-$1.5 billion).

The $100 Billion Club: For the latest quarter reported, Apple continues #1 and largest at $162.9 billion. HP continues in second at $127.7 billion, followed by #3 Microsoft at $121.3 billion. IBM is #4 at $113.8 billion. Cisco is #5 at $91.2 billion. The next group is #6 Google at $86.1 billion, #7 Oracle ($78.3 billion), and #8 Intel ($72.4 billion). Qualcomm is a more distance #9 ($42.4 billion). Amazon is last and #10 at $21.0 billion. I have included Amazon because of the Kindle Fire, streaming, cloud services, and the resulting competition with others listed.



Capital Ratio

The Largest USA Tech Companies have reported an average capital to assets ratio of 54.18%, a slight decrease of -0.45% from the prior quarter. Six of the ten companies reviewed reported increases, led by Intel (+2.3%) and HP (+1.4%). Google reported the largest decrease (-4.8%) followed by Microsoft (-3.5%).

For the latest quarters reported, Qualcomm (77%) has surpassed Google (75%) to have the strongest capital position. Apple is #3 at 69%, followed closely by Intel at 67%. Next are Cisco, Oracle, and Microsoft at 56%, 56%, and 55%, respectively. Amazon is 8th at 36%, followed by HP (33%) and finally IBM (18%) is last and #10.



Status
Updated through Amazon quarterly financial results reported 7-26-12
Next reports: Cisco (August 15), HP (August 22)

Largest USA Tech Companies Earnings Plunge, But Apple Still Dominates

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Largest USA Tech Companies Earnings Plunge, But Apple Still Dominates

Quarterly Net Income

The Largest USA Tech Companies have reported quarterly aggregate net income of $26.3 billion, which is lower than the prior quarter $33.9 billion. This is a sequential QoQ decrease of -$7.68 billion and -23%. Six of the ten companies reviewed reported a QoQ decrease in net income. The net decrease is not too unusual or unexpected as the second quarter of the calendar year is typically a slower financial performance on an annual cyclical basis. The largest sequential QoQ increases were Oracle (+$953 million) and IBM (+$816 million) and HP (+$125 million). The largest sequential QoQ decreases were by Microsoft (-$5.60 billion), Apple (-$2.80 billion), and Qualcomm (-$1.02 billion).

For the latest quarters reported, Apple continues dominating with an incredible $8.82 billion quarterly net income. Second was IBM at $3.88 billion and third was Oracle at $3.45 billion, combined less than half of Apple. The rest of the pack follows with #4 Intel at $2.83 billion, #5 Google at $2.79 billion, #6 Cisco at $2.17 billion, #7 HP at $1.59 billion, and #8 Qualcomm at $1.21 billion. Trailing are #9 Amazon at a mere $7 million and #10 Microsoft at a dismal net loss of -$492 million. I have included Amazon because of the Kindle Fire, streaming, cloud services, and the resulting competition with others listed. Apple comprises approximately 34% of the total quarterly net income of the 10 tech companies listed!



Return on Assets

The Largest USA Tech Companies have reported an average return on assets of +13.45%, a multi-quarter low and -1.13% decrease from the prior quarter of +14.58%. Eight of the ten companies reviewed reported decreases. Amazon and HP dragged the average down the most. The 2 sequential QoQ increases were Cisco (+0.24%) and IBM (+0.17%). The largest sequential QoQ decreases were Microsoft (-6.42%), Apple (-2.08%), and Amazon (-1.00%).

For the latest quarters reported, Best of Breed goes to Apple with a commanding and incredible lead of at +29.70% ROA. Apple is distantly followed by Intel (+17.61%), Qualcomm (+15.26%), and Google (+15.02%). Next are #5 Microsoft (+14.95%), #6 IBM (+14.30%), and #7 Oracle (+13.38%). Significantly lagging the field are #8 Cisco at +8.36% and #9 HP at a much lower +4.12%. Retail-oriented Amazon is last and #10 at a sinking +1.82%.



Updated through Amazon quarterly financial results reported 7-26-12
Next reports: Cisco (August 15), HP (August 22)

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Oracle Reports Strong Quarter at Annual Cyclical Peak

Oracle ($ORCL) reported QE May 2012 financial results on Monday, June 18

Oracle financial performance strengthened QoQ and YoY to the annual May cyclical high. Next quarter, the QE August, performance is projected to slow significantly QoQ and increase YoY.  CEO Larry Ellison said, "The development of Oracle Cloud is strategic to increasing the size and profitability of Oracle’s software business. Our Oracle Cloud SaaS business is nearly at a billion dollar revenue run rate, the same size as our engineered systems hardware business. The combination of engineered systems and the Oracle Cloud will drive Oracle’s growth in FY 2013." The Board of Directors authorized the repurchase of up to an additional $10 billion of common stock under its existing share repurchase program.

The long-term trend is clearly upwards as evidenced by the EPS chart below as each May peak is higher YoY and to a lesser extent for total revenues. The biggest performance concern is the flat to decreasing YoY growth rates in total revenues and slowing YoY growth rates in earnings per share. These are now at +11.3% and +1.3%, respectively. The biggest financial position negative has been the debt. This continues at 21% of total assets, down from a peak of 26% for the QE August 2010. Financial position continues acceptable with adequate capital, moderate debt, and reasonable liquidity.

Oracle Income Statement QE May 2012 Oracle reported total revenues of $10.92 billion, net income of $3.45 billion, and earnings per share of $0.69. From the prior quarter QE February 2012, these were +21%, +38%, and +41%. From the prior year QE May 2011, these were +1.3%, +7.5%, and +11.3%, respectively. Gross margin, operating margin, and net margin were up QoQ and YoY at 82%, 42%, and 32%, respectively. Cash flow from operations of $2.73 was very impressive and the 9th consecutive quarterly increase. The operating expense ratio of 40% was down, at the annual May cyclical low.

Oracle Balance Sheet QE May 2012 Total assets increased to a record $78.3 billion. The capital to assets ratio of 56% is historically strong. The current ratio of 51% is just above the historical average of 49%. The return on assets of +13.38% is is the 4th consecutive quarter above 13%. Total debt at 21% of total assets is just below the historical average of 22%.

Oracle Outlook QE August 2012 Oracle estimates QE August 2012 Non-GAAP EPS of $0.51 to $0.55 and analysts project the midpoint $0.53. This would be an significant -36% decrease QoQ, as expected, but a +10% increase YoY from $0.48. Oracle projects revenues YoY from -2% to +1%. Analysts project $8.66 billion, which would be a -21% QoQ and +3% YoY.











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Oracle CEO Larry Ellison Buying Hawaiian Island Lanai

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Larry Ellison reaches deal to buy 98 percent of the sixth-largest island, Lanai.

MarketWatch is reporting: The 141-square mile island near Maui is currently home to just 3,200 people and two resorts but the current owner, real estate firm Castle & Cooke, said Ellison is planning significant investments to bring in more tourism and jobs, the AP said. He is buying roughly 98% of the island and while the cost was not released, it has previously been reported that the asking price was between $500 million and $600 million.

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Big Tech Assets Rise, Apple Surges to $151 Billion

The Largest USA Tech Companies have reported aggregate total assets of $888 billion, which is the highest in the 5 quarters reviewed and an all-time high. This is a net increase of +$25 billion and +3% from the prior quarter. Apple led the way with a strong +$12 billion increase, followed by Microsoft (+$6 billion), Google (+$5 billion), and Qualcomm (+$4 billion). The only decreases were reported by Amazon (-$5 billion) and IBM (-$1 billion).

The $100 Billion Club: For the latest quarter reported, Apple continues #1 and largest at $150.9 billion. HP continues in second at $127.7 billion, followed by #3 Microsoft at $118.0 billion. IBM dropped to #4 at $115.3 billion. Next is #5 Cisco at $91.2 billion. The next group are #6 Google at $77.1 billion, which surpassed now #7 Oracle ($74.4 billion). Intel continues at #8 ($71.8 billion) followed by #9 Qualcomm ($41.5 billion). Amazon is last and #10 at $20.3 billion. I have included Amazon because of the Kindle Fire, streaming, cloud services, and the resulting competition with others listed.



The Largest USA Tech Companies have reported an average capital to assets ratio of 54.89%, a +1.39% increase from the prior quarter. The net increase was led by Amazon (+5%) and Apple (+3%). Only Google reported a decrease and this was negligible (-0.12%). For the latest quarters reported, Google continues leading with the strongest capital of 80%, followed by Qualcomm at 77%. Apple is #3 at 68%, followed closely by Intel at 65%. Next are Oracle, Microsoft, and Cisco at 58%, 58%, and 56%, respectively. Amazon is 8th at 36%, followed by HP (33%) and finally IBM (18%).




Status Updated through HP quarterly financial results reported 5-23-12

Largest USA Tech Companies Earnings Slip, Apple Dominates

Big Tech Market Cap: Apple Larger Than Microsoft and IBM Combined!

Big Tech Profits Increase: Qualcomm, Apple, Google Lead Surge

Largest USA Tech Companies Earnings Slip, Apple Dominates

The Largest USA Tech Companies have reported quarterly aggregate net income of $33.9 billion, which is lower than the prior quarter $37.4 billion. This is a sequential QoQ decrease of -$3.5 billion and -9.4%. The net decrease is not unusual or unexpected as the first quarter of the calendar year is typically lower than the  prior fourth quarter (Holiday) results on an annual cyclical basis. The largest sequential QoQ increases were HP (+$1.2B) and Qualcomm (+$829 million). The largest sequential QoQ decreases were by IBM (-$2.43 billion), Microsoft (-$1.52 billion), Apple (-$1.44 billion), and Intel (-$622 million).

For the latest quarters reported, Apple leads with an incredible $11.62 billion. Second is Microsoft at $5.11 billion, less than half of Apple. These top two are followed by #3 IBM at $3.07 billion. The rest of the pack follows with #4 Google at $2.89 billion, #5 Intel at $2.74 billion, #6 Oracle at $2.50 billion, #7 Qualcomm at $2.23 billion, and #8 Cisco at $2.17 billion. Trailing are #9 HP at $1.47 billion and #10 Amazon at a mere $130 million. I have included because of the Kindle Fire, streaming, cloud services, and the resulting competition with others listed. Apple comprises 34% of the total quarterly net income of the 10 tech companies listed!



The Largest USA Tech Companies have reported an average return on assets of +14.61%, a +0.19% increase from the prior quarter of 14.42%. Amazon and HP dragged the average down. The largest sequential QoQ increases were Qualcomm (+2.62%), Apple (+1.44%) and Google (+0.75%). The largest sequential QoQ decreases were Microsoft (-1.18%), Intel (-1.09%), and HP (-0.93%).

For the latest quarters reported, Best of Breed goes to Apple with a commanding and incredible lead of at +31.78% ROA, followed by Microsoft at 21.37% and Intel at 18.14%. Next are #4 Google 15.76%, #5 Qualcomm 15.51%, #6 IBM 14.13%, and #7 Oracle 13.44%. Significantly lagging the field are #8 Cisco 8.36% and #9 HP at a dismal 4.74%. Retail-oriented Amazon is last and #10 at +2.82%.



Updated through Cisco quarterly financial results reported 5-9-12
Next reports: HP (May 23), Oracle (June)

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Oracle Financial Performance Strengthens, Next Quarter Projected Stronger

Oracle Summary QE February 2012 Oracle financial performance strengthened QoQ and YoY. The QE February is typically an improvement from the prior QE November, with the next QE May the annual cyclical peak. Oracle's outlook for the next quarter, the QE May, ranges from flat to a solid increase YoY. The next quarter needs to be a breakout quarter or the stock may languish subsequently. The biggest performance concern is the flat to decreasing YoY growth rates in total revenues and flat growth rates in earnings per share. These are now at +3% and +20%, respectively. The biggest financial position negative has been the debt. This continues at 20% of total assets, down from a peak of 26% for the QE August 2010. Financial position continues as adequate capital with moderate debt and reasonable liquidity.

Oracle Income Statement QE February 2012 Oracle reported total revenues of $9.04 billion, net income of $2.50 billion, and earnings per share of $0.49. From the prior quarter QE November 2011, total revenues were +3%, net income +14%, and earnings per share +14%. From the prior year QE February 2011, these were +3%, +18%, and +20%, respectively. Gross margin (see note below), operating margin, and net margin were up QoQ and YoY at 79%, 37%, and 28%, respectively. Cash flow from operations of $1.91 was down QoQ and up YoY. The operating expense ratio (operating expenses divided by total revenues) of 42% was slightly down QoQ and YoY.

Oracle Balance Sheet QE February 2012 Oracle's total assets increased +2% QoQ to $74.36 billion. The capital to assets ratio of 58% is a multi-year high. The current ratio of 50% is about at the historical average. The return on assets of +13.44% is historically very strong, a multi-year high, and has increased for 6 consecutive quarters. Total debt is flat QoQ at 20% of total assets.

Oracle Outlook QE May 2012 Oracle estimates QE May 2012 GAAP earnings per share of $0.62 to $0.67 and Non-GAAP EPS of $0.76 to $0.81. This would be an increase QoQ and flat to an increase YoY for both GAAP and non-GAAP.


Oracle Financial Performance by the Quarters


Oracle Earnings Per Share Current Earnings per Share of $0.49 are +14% QoQ and +20% YoY. The QE February is a typical rebound from the prior QE November. The QE May is the strongest quarter and the QE August is the weakest quarter on an annual cycle. These peaks and lows indicate an annual cyclical nature to Oracle's business. The chart high has been $0.62 for the QE May 2011 and the chart low has been $0.22 for QE August 2009. The EPS chart average is $0.36.




Oracle Cash Flow per Share Current Cash Flow per Share of $1.91 is a decrease QoQ, an increase YoY, and has increased 5 of the past 6 quarters QoQ. The CFS chart average is $1.84.




Oracle Total Revenues and Net Income Current Total Revenues of $9.04B are +3% QoQ and +3% YoY. Total Revenues have increased 5 of the past 6 quarters QoQ. Current Net Income of $2.50B is +14% QoQ and +18% YoY. Net Income has increased 5 of the past 6 quarters QoQ.




Oracle Gross Margin and Net Margin Current Gross Margin (see note below) of 78.89% is up QoQ, up YoY, and above the chart average of 77.27%. Current Net Margin of 27.64% is also up QoQ, up YoY, and above the chart average of 23.66%. [Note: Oracle does not report a gross profit, but includes some allocated cost of revenues in operating expenses as line items. For this analysis, these allocated cost of revenues have been reclassified as cost of revenues and operating expenses are therefore the commonly reported line items of most companies. The gross profit reviewed is not a true gross profit. Operating margin and net margin are not affected by this reclassification.]




Oracle Return on Assets Current Return on Assets of +13.44% is a multi-quarter high, relatively very strong, and has increased 6 consecutive quarters. This indicates an increasing effectiveness in the deployment of assets. The ROA chart average is 12.17%.




Oracle Growth Rates YoY This is the concern about Oracle: declining YoY revenues and YoY earnings per share growth. Current Total Revenues Growth YoY of +3.14% is just above the prior quarter multi-year low and well below the TRG chart average of +22.28%. Current Earnings per Share Growth YoY of +19.51% is an improvement QoQ, a drop YoY, below the EPS chart average of +25.79%.




Oracle Segment Revenues Current Software of $6.43B is the primary driver of revenues and solidly increased QoQ. Current Hardware of $1.47B dipped QoQ and current Service of $1.14B also dipped QoQ.




Oracle Regional Revenues Current Americas of $4.71B is the primary driver of revenues and is up QoQ and YoY. Current Europe, Middle East, Africa of $2.79B is flat QoQ and YoY. Current Asia Pacific of $1.55B slightly increased QoQ and YoY.