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Saturday April 20, 2024



Oracle Reports Quarterly and Full-Year Earnings

Oracle Corporation (ORCL) released its latest quarterly and full-year earnings report on Monday, June 12. The multinational computer technology company's stock rose 5% after the release of the report.

The company posted net revenue of $13.84 billion for the quarter. This was up 17% from $11.84 billion reported in the same quarter last year and exceeded analysts' expectations of $13.74 billion. Revenue for the full year reached $49.95 billion.

"Oracle's revenue reached an all-time high of $50 billion in FY23," said Oracle CEO, Safra Catz. "Annual revenue growth was led by our cloud applications and infrastructure businesses which grew at a combined rate of 50% in constant currency. Our cloud applications growth rate also accelerated in FY23. So, both of our two strategic cloud businesses are getting bigger—and growing faster. That bodes well for another strong year in FY24."

Oracle reported fourth quarter net income of $3.32 billion or $1.19 per adjusted share. Last year at this time, the company reported net income of $3.19 billion or $1.16 per adjusted share. For the full year, net income reached $8.50 billion.

Oracle's cloud applications provided strong growth. The company's cloud services and license support segment revenue was up 23% to $9.37 billion in the quarter. Cloud license and on-premises license segment revenues was down 15% to $2.15 billion and cloud infrastructure climbed 76% to $1.4 billion. Oracle's board of directors declared a quarterly cash dividend of $0.40 per share of common stock. The cash dividend will be due to the stockholder of record on July 12, 2023, with an anticipated payment date of July 26, 2023.

Oracle Corporation (ORCL) shares closed at $125.48, up 10% for the week.

Adobe Quarterly Earnings

Adobe Inc. (ADBE) released its second quarter earnings report on Thursday, June 15. The San Jose, California-based digital media and marketing software maker reported increased revenue, causing shares to rise more than 3% following the release of the report.

The company posted quarterly net revenue of $4.82 billion, up 10% year-over-year and above analysts' expectations of $4.77 billion. At the same time last quarter, Adobe reported revenue at $4.39 billion.

"Adobe achieved record Q2 revenue demonstrating strong demand across Creative Cloud, Document Cloud and Experience Cloud," said Adobe CEO, Shantanu Narayen. "Adobe's ground-breaking innovation positions us to lead the new era of generative AI given our rich datasets, foundation models and ubiquitous product interfaces."

For the quarter, Adobe reported net income of $1.30 billion or $2.82 per adjusted share. This is up from $1.18 billion or $2.49 per adjusted share reported at the same time last year.

Adobe reported increased year-over-year growth in net revenue across all segments of the company. The company's digital media segment revenue increased 10% to $3.51 billion. The company's creative cloud segment revenue grew 9% to $2.85 billion. Adobe's document cloud segment revenue was $659 million, an 11% increase year-over-year. The company's digital experience segment revenue increased 12% to $1.22 billion and digital experience subscription revenue grew 11% to $1.07 billion. The company updated its third quarter revenue target to be between $4.83 billion and $4.87 billion.

Adobe Inc. (ADBE) shares closed at $495.18, up 7% for the week.

The Kroger Co. Reports Earnings

The Kroger Co. (KR) announced its latest quarterly earnings on Thursday, June 15. The grocery store chain's shares fell nearly 3% following the report's release.

Kroger reported quarterly sales of $45.2 billion in the first quarter. This was up from $44.6 billion reported at this time last year and fell just below analysts' expectations of $45.2 billion.

"Kroger achieved solid first quarter results guided by the execution of our Leading with Fresh and Accelerating with Digital strategy," said Kroger's CEO, Rodney McMullen. "As more customers are feeling the effects of inflation and economic uncertainty, we are growing customer households by providing fresher products at affordable prices with personalized rewards. Looking forward, Kroger's go-to-market strategy positions us well in a wide range of economic environments to continue to deliver for our customers, invest in our associates and achieve sustainable and attractive returns for shareholders."

Kroger posted net earnings of $962 million or $1.32 per adjusted share. This was up from net earnings of $664 million or $0.90 per adjusted share at this time last year.

The parent company of Ralphs, Harris Teeter, and Kroger grocery stores reported sales increased 3.5% compared to the same period last year, excluding fuel. The company's Alternative Farming offering increased to 1,094 stores. Kroger's digital sales grew 15% and its delivery sales increased 30% in the quarter. The Fresh Produce Initiative is now certified in 1,738 stores which is driving higher identical sales. Kroger reaffirmed its full-year expectations for identical sales, excluding fuel of 1.0% to 2.0%.

The Kroger Co. (KR) shares ended the week at $46.17, relatively unchanged for the week.

The Dow started the week of 6/12 at 33,907 and closed at 34,299 on 6/16. The S&P 500 started the week at 4,308 and closed at 4,410. The NASDAQ started the week at 13,326 and closed at 13,690.

Treasury Yields Fall

U.S. Treasury Yields were lower at the beginning of the week as investors prepared themselves for the latest inflation data ahead of this week's Federal Reserve meeting. Yields fell at the end of the week as investors digested the Fed's latest decision to pause interest rate hikes after more than a year of consecutive rate increases.

On Tuesday, the U.S. Department of Labor announced that the consumer price index (CPI), which measures the cost of dozens of everyday consumer goods, rose 0.1% in May, in line with economists' forecasts. The CPI year-over-year fell to 4.0% from 4.9% in April and marked the lowest 12-month rate change in more than two years.

"The encouraging trend in consumer prices will provide the Fed some leeway to keep rates unchanged this month," said chief economist at LPL Financial, Jeffrey Roach. "And if the trend continues, the Fed will not likely hike for the rest of the year."

The benchmark 10-year Treasury note yield opened the week of June 12 at 3.74% and traded as high as 3.84% on Wednesday. The 30-year Treasury bond opened the week at 3.88% and traded as high as 3.94% on Wednesday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment remained at 262,000 for the week ending June 10, unchanged from a revised level of 262,000 the prior week and above analysts' expectations of 249,000. Continuing unemployment claims rose by 20,000 to 1.78 million.

"We have noted in recent weeks that the data suggest that the labor market is in the early stages of cooling," said U.S. economist at Jeffries, Thomas Simons. "We will see claims increase further over time, but there will be fits and starts."

The 10-year Treasury note yield finished the week of 6/12 at 3.77%, while the 30-year Treasury note yield finished the week at 3.86%.

Mortgage Rates Continue Decline

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, June 15. Mortgage rates fell moderately as investors anticipated a halt in interest rate increases by the Federal Reserve.

This week, the 30-year fixed rate mortgage averaged 6.69%, down from last week's average of 6.71%. Last year at this time, the 30-year fixed rate mortgage averaged 5.78%.

The 15-year fixed rate mortgage averaged 6.10% this week, up from 6.07% last week. During the same week last year, the 15-year fixed rate mortgage averaged 4.81%.

"Mortgage rates decreased slightly this week in anticipation of the pause in rate hikes by the Federal Reserve," said Freddie Mac's Chief Economist, Sam Khater. "As inflation continues to decelerate, economic growth is slowing and the tightening cycle of monetary policy is reaching its apex, which means mortgage rates are expected to decrease later this year and into next."

Based on published national averages, the savings rate was 0.40% as of 5/15. The one-year CD averaged 1.59%.

Editor's Note: The publicly available financial information is offered as a helpful and informative service to our friends. This article is not an endorsement of any company, product or service.

Published June 16, 2023
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