After Oracle Corp. Chief Executive Safra Catz offered an in-line forecast and Chairman Larry Ellison knowingly laughed when asked about storing TikTok’s data in the U.S. on Thursday afternoon, the software company’s shares rebounded from a steep after-hours post-earnings decline.
Oracle ORCL,
“I’ll second that,” Ellison said. “It’s excellent.” Neither executive confirmed the deal.
Shares initially dropped after Oracle reported that fiscal third-quarter profit fell, which it blamed on investments including Ampere and Oxford Nanopore Technologies PLC ONT,
“Both non-GAAP and GAAP EPS are expected to decline year-over-year due to some large investment gains we saw last year, as well as a very low tax rate last year,” Catz said on the call, noting an increase in Oracle’s tax rate to 18.4% from 10.7%.
Catz forecast fourth-quarter earnings of $1.35 to $1.39 a share on revenue growth of 3% to 5%, or $11.56 billion to $11.79 billion, despite not including any revenue from the company’s $28.3 billion deal to acquire Cerner Corp. CERN,
Reuters reported Thursday morning that Oracle was near a deal with TikTok to store information of U.S. users without the video-sharing app’s Chinese parent company ByteDance having access to it. In 2020, Oracle stood to acquire TikTok in a complicated deal with Walmart Inc. WMT,
For the fiscal third quarter, Oracle reported net income of $2.32 billion, or 84 cents a share, compared with $5.02 billion, or $1.68 a share, a year ago. Adjusted earnings, which exclude stock-based compensation expenses and other items, were $1.13 a share, compared with $1.16 a share in the year-ago period. Revenue rose to $10.51 billion from $10.09 billion in the year-ago quarter.
Analysts had estimated earnings of $1.18 a share — based on Oracle’s forecast of $1.14 to $1.18 a share — and revenue of $10.51 billion.
The stock moves followed a 0.7% rise in the regular session to close at $76.65. Oracle shares are up 6% over the past 12 months, versus a 5% decline by the iShares Expanded Tech-Software Sector ETF IGV,
