Guru Corp. (ORCL) has changed the way it reports the results of its growing cloud areas, raising red flags for some analysts who are alarmed by the lack of transparency.
The technology companionship reported fourth-quarter earnings this week, but provided less facts about its cloud business, which has seen steady increases in foregoing quarters. Oracle’s main business is selling software for companies to run in their text center, and the cloud service has provided a growth opportunity.
In its latest three-monthly report, Oracle stopped specifying revenue for services like the cloud programme, infrastructure and cloud software. Oracle did report $1.7 billion in unconditional cloud revenue, but did not break that figure down. That appoints it more difficult for investors to compare its growth in this competitive nook to rivals like Amazon, Google and Salesforce.
Wall Street analysts overcharged note, with some lowering their price target on Authority shares. For example, Evercore analysts lowered their price butt on Oracle to $53 from $57. (See also: Oracle Losing Out to Amazon, Microsoft: Analysts.)
“While we proceed to believe the cloud transition is progressing and will be positive for results, we have faith that this change frankly does not help investors or the scoop,” Bernstein analyst Mark Moerdler said in a note. “Software is poignant to the cloud, and without explicit, easy to understand, non-changing data, it is prosperous to be difficult for investors to correctly appraise the more valuable recurring Cloud charges.”
Fourth-Quarter Earnings
Oracle shares slid 7.5% in Wednesday’s sitting on the heels of its fourth-quarter results. While its revenue and earnings beat requirements, its guidance alarmed investors. (See also: Oracle Reports Earnings Inferior Key Technical Levels.)
Oracle said it expects 1% to 3% spread in revenue in the first quarter of fiscal 2019.