Wall Street sees Q1 EPS of 86c on revenue of $9.19B
Oracle (ORCL) is scheduled to report results of its first fiscal quarter after the market close on September 10, with a conference call scheduled for 5:00 pm ET. What to watch for:
1. GUIDANCE: Along with its last report, Oracle guided for Q1 earnings per share of 85c-89c on revenue growth of (1%)-1%. At the time, analysts were expecting the company to report Q1 EPS of 85c on revenue of $9.11B, but those estimates have since risen to 86c and $9.19B, respectively.
2. TIKTOK: On August 18, CNBC reported that Oracle was working with U.S. venture capital firms to acquire TikTok's U.S., Canadian, Australian, and New Zealand operations, issuing a challenge to Microsoft's (MSFT) reported bid for the assets. The next day, the Wall Street Journal reported that U.S. President Donald Trump, who had ordered TikTok's Chinese parent ByteDance to sell the video-sharing app's U.S. assets or be banned in the U.S., voiced support for Oracle in the matter, saying he thinks Oracle is a "great company."
Later in the month, as TikTok sued the Trump administration over its efforts to ban TikTok in the U.S., the Journal reported that General Atlantic and Sequoia Capital, two top investors in ByteDance, were vying to be part of a deal to acquire the U.S. operations, with the firms being key drivers behind a potential bid by a group including Oracle. On August 27, TheWrap reported that Oracle and Microsoft had both submitted bides, with Oracle offering $10B in cash, $10B in stock, and 50% of annual TikTok profit to flow back to ByteDance for two years. The Wall Street Journal later reported that TikTok was asking $30B for its U.S. operations, noting that Microsoft's joint bid with Walmart (WMT) was seen as the frontrunner for the assets.
Meanwhile, the Journal reported on August 30 that TikTok deal talks had slowed down as all parties involved huddled to weigh new Chinese restrictions that appear designed to affect a potential sale. In late August, the Journal noted, China issued new new restrictions on the export of artificial-intelligence technology that forced ByteDance, TikTok's parent, to slow down talks with companies over a sale. In addition, Bloomberg reported earlier this month that the White House was planning to establish boundaries to clarify the particular transactions that will be banned between the Chinese companies and U.S. businesses, as well as when such actions will take effect. Lastly, the Wall Street Journal said yesterday that ByteDance is in talks with the U.S. government over possible deals that would allow the video-sharing app to avoid a full sale of its U.S. business.
3. JEDI: Late last week, the U.S. Department of Defense said that, following a "comprehensive" re-evaluation of the JEDI Cloud proposals, it determined that Microsoft's proposal "continues to represent the best value to the Government." Previously it has been reported that a U.S. appeals court denied Oracle's appeal in its dispute over the Pentagon's $10B cloud-computing contract.