Oracle's Cloud Infrastructure Anticipated to Boost 4Q Results

Cloud growth and macroeconomic challenges in focus ahead of earnings report

Oracle Corporation is poised to announce its fiscal fourth-quarter results after the market closes on Tuesday. Analysts and investors are keeping a close eye on the cloud-software giant, anticipating key insights into its financial health and strategic direction.

The consensus among ten analysts polled by FactSet forecasts Oracle's profit at $3.29 billion, slightly down from $3.32 billion in the same quarter last year. Despite this marginal dip, the company's robust cloud infrastructure business remains a significant area of interest.

After adjusting for certain one-time charges, 26 analysts polled by FactSet predict Oracle will report an adjusted profit of $1.65 per share. This metric provides a clearer view of the company’s operational performance, excluding extraordinary items.

Oracle's cloud-infrastructure segment has experienced significant growth, with cloud revenue surging by 25% in the fiscal third quarter, driven by a boom in AI interest. However, the company has faced supply constraints that have tempered its ability to meet soaring demand. Oracle has indicated that it anticipates revenue growth to accelerate as these supply issues are resolved, making this a crucial area for analysts to monitor.

The broader software industry is currently navigating turbulent waters, with several vendors reporting tighter IT budgets among their customers. Morgan Stanley analysts have noted that the macroeconomic environment might be impacting Oracle's sales, based on their intra-quarter checks. Consequently, updates on how the broader economic conditions are affecting Oracle’s cloud results will be highly scrutinized by analysts and investors alike.