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First-quarter earnings of S&P 500 enterprises expected to mark the first decline in 2 years

First-quarter earnings of S&P 500 enterprises expected to mark the first decline in 2 years.

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The corporate reports for the new quarter are showing the expected deficiency – worse-than-expected guidance. For Q1 2019, the estimated earnings decline for the S&P 500 is -3.4%. If -3.4% is the actual decline for the quarter, it will mark the first year-over-year decline in earnings for the index since Q2 2016.

For Q1 2019, 76 S&P 500 companies have issued negative EPS guidance and 27 S&P 500 companies have issued positive EPS guidance.

This week was not much busy on financial statements, but several technology companies posted their earnings – Oracle, Adobe and Broadcom.

Oracle suffers from worse earnings and revenue outlook

Oracle’s stock declined after the company gave a disappointing fourth-quarter earnings and revenue forecast, a further hurdle to the software company’s efforts to become a major player in the cloud computing industry.

The revenue for the current period will be almost the same or will shrink by about 2% YoY, revealed the Chief Executive Safra Catz during a conference call. This means that the company will report a fourth consecutive quarter with a decline in sales revenue. Excluding some costs, the earnings of the company will amount to 1.05-1.09 USD per share, compared to the analysts’ average forecast of 1.09 USD.

Oracle’s stock price dropped by around 4% during post-trade trading after data were released. Previously, the stock ended the day at a price of 53.05 USD. Since the beginning of the year, their value has risen by 17%.

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Oracle has built a broad portfolio of Internet-based programs in an attempt to raise its market share amid severe competition with Amazon.com, Microsoft and Salesforce.com. The company is still struggling to attract corporate customers to replace existing software used on their own database servers. To compensate for the slow process, the CEO Mark Hurd, who shares the post with Safra Catz, has set a goal of reaching 50% market share in Internet-based applications.

The annual revenue for the period ending February 28 has reached 9.61 billion USD, against analysts forecasts for 9.59 billion USD. Excluding some effects, the profit is 0.87 USD per share compared to the expectations for 0.84 USD per share forecast.

The cloud revenue and licenses rose by 1% to 6.66 billion USD in the third quarter. The unit accounts for over 69% of total revenue.

The revenues in business with cloud licenses and company software licenses have shrunk by 4% to 1.25 billion USD. If currency fluctuations are removed, the amount has kept its level from last year at the same time. The decline indicates that the company has difficulties in persuading new users to sign contracts. Instead, customers benefit from the Oracle – Bring Your Own License program where the company can move existing Oracle cloud software without having to make a new deal.

Adobe beat revenue estimates for the 11th straight quarter

The US computer software company Adobe beat Wall Street estimates, reporting record revenue amid the strong performance by its Digital Experience cloud unit. Adobe reported first-quarter earnings of 1.71 USD per share, beating the Wall Street estimate of 1.61 USD per share.

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The company beat revenue estimates for the 11th straight quarter, coming in at 2.6 billion USD, slightly ahead of the consensus forecast of 2.55 billion USD. Adobe revenue is about 25% higher than during its first quarter of fiscal 2018.

The software maker’s Digital Media segment generated 1.78 billion USD in sales. Its Creative segment added 1.49 billion USD, Digital Experience brought 743 million USD, while Document Cloud contributed with record revenue of 282 million USD during the period.

“Adobe is fueling the creative economy, driving the paper-to-digital revolution and enabling businesses to transform through our leadership in customer experience management”, said the President and CEO of Adobe, Shantanu Narayen. “Our results in Q1 reflect continued momentum across Adobe Creative Cloud, Document Cloud and Experience Cloud”, added he.

For its second quarter of fiscal 2019, Adobe projects adjusted earnings at 1.77 USD per share. Revenue is predicted to be 2.7 billion USD, below the 2.72 billion USD that analysts see.

Broadcom reported better-than-expected earnings in Q1 2019

Broadcom reported first-quarter earnings that beat analysts’ expectations on Thursday and revenue that fell short of forecasts.

The semiconductor manufacturer reported earnings per share of 5.55 USD on revenue of 5.79 billion USD. Analysts forecast EPS of 5.23 USD on revenue of 5.83 billion USD. That compared to EPS of 5.12 USD on revenue of 5.33 billion USD in the same period a year earlier. The company had reported EPS of 5.85 USD on revenue of 5.45 billion USD in the previous quarter.

Broadcom shares gained 5.16% to trade at 282.05 USD in after-hours trade following the report. Broadcom shares have risen 5.5% since the beginning of the year, while the S&P 500 index has climbed 12%. In the final minutes of trading on Thursday, shares hit 268.20 USD, a climb of nearly 3% in the last 12 months.

Broadcom expects full-year revenue of 24.5 billion USD.