Falling company shares
Oracle shares fell 4.6% after Tuesday's close as the company announced it would double its capital investment in cloud services this fiscal year to nearly $4bn. This will have an impact on earnings.
Oracle (ORCL) on Tuesday after the close of trading announced results for its fourth quarter and full fiscal 2021, which ended May 31.
Oracle beat analysts' average forecasts for both quarterly earnings per share and revenue, and also announced a quarterly dividend. For the full fiscal year, Oracle's sales were up 3.6% from the previous year.
However, Oracle is still struggling to compete in the cloud computing market. Despite billions in investments, the company's overall sales have quadrupled over the past six years.
Many investors and analysts believe that Oracle was rather late in shifting its business focus to cloud services and is still a niche player today compared to giants like Amazon (AMZN), Microsoft (MSFT) or Alphabet's Google (GOOGL, GOOG).
In addition, Oracle shares have already risen 26.2% since the start of 2021, surpassing the 20.4% rise for all of 2020.
Oracle's reports
For Q4 FY2021, Oracle reported a profit of 26%. 2021, Oracle posted earnings per share of $1.54, up 28% from last year and analyst forecasts of $1.31.
Quarterly revenue rose 8% to $11.23 billion, beating Wall Street's average estimate of $11.04 billion.
For the full fiscal year, Oracle had sales of $40.48 billion, up 3.6% from the previous fiscal year.
Oracle's board has declared a quarterly dividend of $0.32 per share, which will be paid on July 29 to shareholders of record by July 15.
Oracle's forecasts
Oracle CEO Safra Catz said her company aims to roughly double its capital investment in data centres and cloud services in fiscal 2022 to nearly $4 billion.
At the same time, revenue growth for the first quarter is projected to be 3-5% and sales growth for the full fiscal year 2022 will exceed 3.6%.
First-quarter earnings per share are expected to be between $0.94 and $0.98, below the average expectations of analysts, who are forecasting a figure of $1.03.
