Friday June 24, 2022
Oracle Reports Earnings
The company posted net revenue of $11.8 billion for the quarter, up 5% from $11.2 billion reported in the same quarter last year. For the full year, revenue was up 5% to $42.4 billion.
"We continued to improve our top line results again this quarter with total revenue growing 10% in constant currency," said Oracle CEO, Safra Catz. "These consistent increases in our quarterly revenue growth rate typically have been driven by our market leading Fusion and NetSuite cloud applications. But this Q4, we also experienced a major increase in demand in our infrastructure cloud business—which grew 39% in constant currency."
The company reported net income of $3.19 billion or $1.16 per adjusted share, down from $4.03 billion or $1.37 per adjusted share in the same quarter last year. For the full year, net income was reported at $6.72 billion.
Oracle's cloud applications provided strong growth. The company's cloud services and license support segment revenue was up 3% to $7.6 billion in the quarter and grew 5% to $30.2 billion for the full year. The cloud license and on-premises license segment revenues increased 18% to $2.5 billion for the quarter, and increased 9% to $5.9 billion for the full year. Oracle's board of directors declared a quarterly cash dividend of $0.32 per share of common stock. The cash dividend will be due to the stockholder of record on July 12, 2022, with an anticipated payment date of July 26, 2022.
Oracle Corporation (ORCL) shares closed at $67.72, up 3% for the week.
Adobe Quarterly Earnings
Adobe Inc. (ADBE) released its second quarter earnings report on Thursday, June 16. The San Jose, California-based digital media and marketing software maker reported increased revenue and income.
The company posted quarterly net revenue of $4.39 billion, up 14% year-over-year. At the same time last quarter, Adobe reported revenue at $3.84 billion.
"Adobe achieved record Q2 revenue with strong demand across Creative Cloud, Document Cloud and Experience Cloud," said Adobe CEO, Shantanu Narayen. "We are winning in our established businesses and seeing significant momentum in new categories from content authoring for a broad base of creators to PDF functionality on the web to the leading real-time customer data platform for global enterprises."
For the quarter, Adobe reported net income of $1.18 billion or $2.49 per adjusted share. This is up from $1.12 billion or $2.32 per adjusted share reported at the same time last year.
Adobe reported increased year-over-year growth in net revenue in many segments of the company. The company's digital media segment revenue increased 15% to $3.20 billion. The company's creative cloud segment revenue grew 12% to $2.61 billion. Adobe's document cloud segment revenue was $595 million, a 27% increase year-over-year. The company's digital experience segment revenue increased 17% to $1.10 billion and digital experience subscription revenue grew 18% to $961 million. The company updated its third quarter revenue target to $4.43 billion.
Adobe Inc. (ADBE) shares closed at $360.79, down 4% for the week.
DocuSign Reports Earnings
DocuSign, Inc. (DOCU) reported its quarterly earnings on Thursday, June 9. DocuSign shares fell 24% following the release of the report, despite increased revenue results.
The digital signature software company reported $588.7 million in quarterly revenue. This was up 25% from revenue of $469.1 million at the same time last year and exceeded analysts' estimates of $581.8 million.
"We delivered solid first-quarter results, growing revenue by 25% year-over-year and adding nearly 67,000 new customers, bringing our total global customer base to 1.24 million," said DocuSign CEO, Dan Springer. "We also bolstered our leadership team with key new hires who, together with our existing team, are ensuring we're well-positioned to grow and scale our business. With over a billion users worldwide, the proven value of our products, and the significant opportunity we have ahead of us, we're confident in our ability to successfully navigate the challenges of a dynamic global environment."
DocuSign posted a net loss for the first quarter of $27.4 million. This was an increased loss from $8.4 million at this time last year.
DocuSign experienced strong growth early in the pandemic with the increase of online transactions. The company continues to transform how agreements are prepared and managed throughout the world, increasing its subscription revenue 26% year-over-year. Earlier this month, DocuSign announced an expansion of its partnership with Microsoft offering new DocuSign Agreement Cloud integrations throughout Microsoft's business solutions and simultaneously, increasing the use of each other's products within each company.
DocuSign, Inc. (DOCU) shares ended the week at $60.55, down 3% for the week.
The Dow started the week of 6/13 at 31,145 and closed at 29,889 on 6/17. The S&P 500 started the week at 3,838 and closed at 3,675. The NASDAQ started the week at 10,987 and closed at 10,798.
Treasury Yields Move Lower
On Wednesday, the Federal Reserve increased its benchmark funds rate by 75 basis points, the largest increase since 1994. The increase came after the U.S. consumer price index, which measures the cost of dozens of everyday consumer goods, rose 8.6% year-on-year in May.
"Recognizing that hiking more now means less later, the Fed demonstrated its resolve to tame inflation without undermining its employment mandate," said co-head of U.S. equity at Lazard Asset Management, Ronald Temple. "While some spectators argued for an even steeper hike, the Fed understood that the combination of rate hikes and quantitative tightening already takes the US into uncharted territory with significant risks to growth. The hike today sent exactly the right message to markets."
The benchmark 10-year Treasury note yield reached a high on Tuesday of 3.50% and traded as low as 3.19% on Thursday.
On Thursday, the U.S. Department of Labor reported that initial claims for unemployment fell to 229,000 for the week, a decrease of 3,000 claims from the previous week's revised claims of 232,000. This exceeded economists' estimates of 220,000 and remains at the highest level of unemployment since January.
"While the level of claims remains low, and the overall labor market remains extremely tight by historic standards, the latest data suggest that some sectors may be experiencing a modest uptick in layoffs amid rising concerns over inflation" and the economic outlook, said U.S. economist of Oxford Economics, Mahir Rasheed.
The 10-year Treasury note yield closed at 3.236% on 6/17, while the 30-year Treasury bond yield was 3.282%.
Mortgage Rates Surge
This week, the 30-year fixed rate mortgage averaged 5.78%, up from last week's average of 5.23%. Last year at this time, the 30-year fixed rate mortgage averaged 2.93%.
The 15-year fixed rate mortgage averaged 4.81% this week, up from 4.38% last week. During the same week last year, the 15-year fixed rate mortgage averaged 2.24%.
"Mortgage rates surged as the 30-year fixed-rate mortgage moved up more than half a percentage point, marking the largest one-week increase in our survey since 1987," said Freddie Mac's Chief Economist, Sam Khater. "These higher rates are the result of a shift in expectations about inflation and the course of monetary policy. Higher mortgage rates will lead to moderation from the blistering pace of housing activity that we have experienced coming out of the pandemic, ultimately resulting in a more balanced housing market."
Based on published national averages, the savings rate cap was 0.07% as of 5/16. The one-year CD averaged 0.21%.