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Update: Oracle Corp. (NYSE: ORCL) stock slumped some 6% to $36.52 after hours Tuesday following Q3 results that missed on the top and bottom line.
The software giant posted EPS of $0.68, 2 cents shy of estimates, on revenue of $9.3 billion, short of the $9.4 billion analysts were looking for.
Despite the misses, improvements were logged across all segments.
New software licenses and cloud subscriptions revenue rose 4% to $2.4 billion. Software license updates and product support revenue was up 5% to $4.6 billion. Hardware systems products revenue climbed 8% to $725 million.
"In constant currency, our Cloud Software Subscriptions revenues grew 25% and our Engineered Systems revenue grew more than 30% in the quarter," Oracle President and CFO Safra Catz said in a statement. "Oracle Cloud Applications and Engineered Systems are both rapidly growing, billion-dollar run-rate businesses. Those two high-growth businesses helped us deliver record year-to-date operating cash flow, and a record $15 billion of operating cash flow over the past twelve months."
A conference call is scheduled for 5 p.m. EST.
This updates our original story published earlier today:
Investors are hoping Oracle Corp. (NYSE: ORCL) will duplicate the same stellar results posted in December when the company reports fiscal Q3 2014 earnings Tuesday after the close.
Analysts are looking for a 4% increase in revenue to $9.4 billion and earnings per share to climb a nickel year over year.
Consensus estimates have the software giant reporting third-quarter earnings per share of $0.70, a penny ahead of the $0.69 per share logged in the previous quarter. Revenue is expected to come in at $3.19 billion.
Boding well for investors heading into the release is that average earnings estimates have remained steady over the last three months. Moreover, analysts underestimated the company's previous quarter by about 3%.
Additionally, the Redwood City, Calif.-based company has only fallen short of expectations in just one of the last four quarters, and then by just a penny per share.
Ahead of Tuesday's report, Evercore Partners lifted its price target on Oracle to $40. That followed a similar increase last week from Wedbush, as well as a Barclays boost last week from $41 to $44.
Oracle stock, which has barely budged from $37.78 on the first trading day of 2014, is due for a bounce. A better-than-expected report or rosy guidance could send shares sharply higher. Indeed, ORCL shares climbed roughly 9% in the days following its Q2 report.
In order to get that bounce, here's what Oracle needs to report...
What to Watch in Oracle's (NYSE: ORCL) Earnings Report Today
Despite an encouraging Q2, concerns linger about ORCL's ability to grow.
In Tuesday's report, Wall Street will be closely watching Oracle's progress in its hardware products, software sales, cloud business, and hints of additional acquisitions for signs of continued growth.
Hardware: Sales of computer servers and hardware, a weak spot, are expected to rise 2.7% from a year ago. That would be an improvement from Q2's showing of down 3%. "Oracle's hardware product revenue may be turning the corner to year over year growth, as Oracle's Exa (engineered systems) revenue growth mitigates the headwinds in the high-end server market," Wedbush analyst Steve Koenig wrote in a research note.