Oracle Expected To Report An In-line Quarter, Says Macquarie

Although Oracle Corporation (NYSE: ORCL)'s earnings missed estimates in the fourth quarter, Macquarie expects the company to report in-line results for the first quarter. The company is scheduled to announce its results on Thursday after the market closes.

Analysts Sarah Hindlian and Frederick Havemeyer reiterated their Outperform rating with a target price of $48 citing its NetSuite Inc (NYSE: N) acquisition as a reflection of being more aggressive in the cloud space.

The brokerage pointed out the continued momentum in both Paas and SaaS, driven by the fresh "accelerated buying experience" and other factors like enhanced functionality from acquisitions and investments. In any case, the first quarter could reflect a typical seasonal factor of softness in the on-premise business.

Related Link: MKM Believes Oracle Could Up Its NetSuite Offer Price To $112 Per Share

"While investors tend to wait to own Oracle into the seasonally stronger back half of the year, we encourage investors to take advantage of any weakness ahead of Oracle Open World in San Francisco next week, and the company's Analyst Day on 9/22, where we anticipate an update on Oracle's cloud-first database 12cR2 strategy," the analysts told clients in a research note.

The analysts expect pound (GBP) weakness to impact Oracle revenue since the company gets 6 percent of its revenue from the region. The lead analyst expects 2.9 percent year-over-year revenue growth to $8.692 billion on a constant currency basis for the first quarter while, Street analysts have consensus revenue projection of $8.7 billion.

The brokerage expects outlook would be based on NetSuite acquisition. However, Macquarie does not expect Oracle to add NetSuite for the second quarter due to uncertainty.

Oracle was relatively flat on the day at $40.26 at time of writing. NetSuite was slightly down during that time, seen at $109.87.

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