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Tag: analyst estimates

  • Oracle forecasts miss Wall Street targets while spending rises, shares slide 10%

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    By Juby Babu and Stephen Nellis

    Dec 10 (Reuters) – Oracle forecast sales and profit that missed analyst estimates on Wednesday, while saying that spending would rise by $15 billion compared with earlier estimates – a sign that big capital outlays to chase AI cloud-computing customers is not turning ​into profit as fast as Wall Street had expected.

    Shares of the Austin, Texas-based company slumped 10% in extended trading.

    Oracle has leapt to renewed prominence ‌with grand plans to build AI cloud data centers, and its results are viewed as a sign of whether there is an AI bubble and how it will raise money to build that ‌infrastructure.

    Oracle said that adjusted profit for the current fiscal third quarter would be $1.64 to $1.68 per share, below analyst estimates of $1.72 per share, according to LSEG data. Oracle’s third-quarter revenue growth forecast of between 16% and 18% also missed analyst estimates of 19.4% growth to $16.87 billion, according to LSEG data, and Oracle’s entire forecast range of cloud sales growth also missed LSEG estimates of $8.87 billion.

    At the same time, Oracle executives said that capital expenditures for fiscal 2026 are now expected to be $15 billion higher than the $35 billion ⁠figure the company estimated in September during its first-quarter ‌earnings call.

    “The ramp in capex and unclear debt needs are causing uncertainty among investors,” said Melissa Otto, head of research at S&P Global’s Visible Alpha.

    For the just-ended fiscal second quarter, Oracle reported total revenue of $16.06 billion, compared with analysts’ average estimate of $16.21 billion, ‍according to data compiled by LSEG. Adjusted operating income of $6.7 billion also missed Wall Street’s average target of $6.8 billion, according to LSEG data.

    “Although Oracle’s shares are buoyed by its September surge, this revenue miss will likely exacerbate concerns among already cautious investors about its OpenAI deal and its aggressive AI spending,” eMarketer analyst Jacob Bourne said in a statement.

    Oracle’s closely watched ​metric for future cloud contracts also missed Wall Street estimates.

    Oracle also reported $523 billion in future contracts, up 14.94% from the $455 billion it reported in September, when ‌it revealed a slew of cloud-computing deals with ChatGPT creator OpenAI and others that sent its shares skyrocketing. But the $523 billion figure fell below analyst estimates of $526 billion, according to Visible Alpha data.

    On a conference call with analysts, Chief Executive Officer Clay Magouyrk fielded questions on how Oracle would finance building the data centers needed for its cloud contracts.

    “We have some other interesting models that we’ve been working on,” he said. “One of them is that customers can actually bring their own chips, and in those models, Oracle obviously doesn’t have to incur any capital expenditures upfront for that model.”

    He added: “Similarly, we have different models that we’re working on with ⁠different vendors, where some vendors are actually very interested in a model where they rent ​their capacity rather than selling that capacity.”

    Oracle posted fiscal second-quarter adjusted profit of $2.26 per share, above ​analyst estimates of $1.64, according to LSEG data. However, Oracle said both adjusted and unadjusted profits were higher on a one-time $2.7 billion pretax gain on selling its stake in chip designer Ampere Computing.

    Larry Ellison, Oracle chairman, said the firm chose to sell its shares in ‍Ampere because it plans to have a ⁠policy of neutrality about which chips it uses in its data centers and that “we no longer think it is strategic for us to continue designing, manufacturing and using our own chips in our cloud datacenters.”

    Ellison said that Oracle would continue to buy Nvidia‘s latest chips, but that “we need to ⁠be prepared and able to deploy whatever chips our customers want to buy.”

    Oracle is building massive data centers for OpenAI, which Reuters has reported is working with Broadcom to develop its own custom ‌AI chip.

    Shares of Nvidia and Broadcom were both down less than 1% after Oracle’s results.

    (Reporting by Juby Babu in Mexico City and ‌Stephen Nellis in San Francisco; Editing by Maju Samuel, Peter Henderson and Matthew Lewis)

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  • OneWater (NASDAQ:ONEW) Misses Q2 Revenue Estimates, Stock Drops 14.6%

    OneWater (NASDAQ:ONEW) Misses Q2 Revenue Estimates, Stock Drops 14.6%

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    OneWater (NASDAQ:ONEW) Misses Q2 Revenue Estimates, Stock Drops 14.6%

    Boat and marine products retailer OneWater Marine (NASDAQ:ONEW) missed analysts’ expectations in Q2 CY2024, with revenue down 8.7% year on year to $542.4 million. It made a non-GAAP profit of $1.05 per share, down from its profit of $1.95 per share in the same quarter last year.

    Is now the time to buy OneWater? Find out in our full research report.

    OneWater (ONEW) Q2 CY2024 Highlights:

    • Revenue: $542.4 million vs analyst estimates of $611 million (11.2% miss)

    • EPS (non-GAAP): $1.05 vs analyst estimates of $2.17 (51.6% miss)

    • Gross Margin (GAAP): 24.4%, down from 26.8% in the same quarter last year

    • Locations: 98 at quarter end, down from 99.5 in the same quarter last year

    • Market Capitalization: $444.5 million

    “In the third quarter, our strategic inventory management and operational execution drove outperformance against the industry. However, our performance for the quarter was below our expectations due to a progressively weaker market environment and a negative impact from weather in Texas,” commented Austin Singleton, Chief Executive Officer at OneWater.

    A public company since early 2020, OneWater Marine (NASDAQ:ONEW) sells boats, yachts, and other marine products.

    Boat & Marine Retailer

    Retailers that sell boats and marine products sell products, sure, but they also sell an image and lifestyle to an often wealthier customer. Unlike a car–which many use daily to get to/from work and to run personal and family errands–a boat or yacht is certainly a discretionary, luxury, nice-to-have purchase. While there is online competition, especially for research and discovery, the boat and yacht market is still very brick-and-mortar based given the magnitude of the purchase and the logistical costs associated with moving these products over long distances.

    Sales Growth

    OneWater is a small retailer, which sometimes brings disadvantages compared to larger competitors that benefit from economies of scale. On the other hand, one advantage is that its growth rates can be higher because it’s growing off a small base.

    As you can see below, the company’s annualized revenue growth rate of 20.8% over the last five years was exceptional as it added more brick-and-mortar locations and increased sales at existing, established stores.

    OneWater Total RevenueOneWater Total Revenue

    OneWater Total Revenue

    This quarter, OneWater missed Wall Street’s estimates and reported a rather uninspiring 8.7% year-on-year revenue decline, generating $542.4 million in revenue. Looking ahead, Wall Street expects sales to grow 7.1% over the next 12 months, an acceleration from this quarter.

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    Key Takeaways from OneWater’s Q2 Results

    We struggled to find many strong positives in these results. Its revenue and EPS missed analysts’ expectations and its full-year earnings forecast fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 14.6% to $25.89 immediately after reporting.

    OneWater may have had a tough quarter, but does that actually create an opportunity to invest right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.

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  • Qualcomm profit forecast beats estimates amid AI push, stock slips

    Qualcomm profit forecast beats estimates amid AI push, stock slips

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    By Stephen Nellis and Max A. Cherney

    (Reuters) – Qualcomm on Wednesday forecast fiscal second-quarter profit slightly above Wall Street estimates and sales in line with market expectations, as a new line of AI-enabled chips helps power it out of last year’s smartphone slump.

    The sales outlook reflects a ramp-up in purchases of new Qualcomm chips with features designed to help run chatbots, image generators and other artificial-intelligence features directly on a device instead of in cloud computing data centers.

    Qualcomm shares initially rose sharply in after-hours trade but then reversed course to trade down 2%.

    Qualcomm predicted sales and adjusted profit with a midpoint of $9.30 billion and $2.30 per share for the current fiscal second quarter ending in March. The outlook compares with analyst estimates of $9.30 billion and $2.25 per share, according to data from LSEG.

    In addition to the results, the company said on Wednesday it has reached a chip supply deal with Samsung to supply chips globally for its top-end Galaxy S24 model.

    In its patent business, Qualcomm said Apple extended a licensing deal through March 2027. Qualcomm said in September it had signed a deal to supply Apple with chips through 2026 but noted that part of a patent deal made with the iPhone maker in the wake of a major antitrust battle was set to expire next year.

    For Qualcomm, “5% revenue growth and 24% earnings growth is very constructive in a skeptical earnings season environment,” said Thomas J. Hayes of Great Hill Capital.

    Qualcomm is the biggest supplier of chips to a smartphone market that had its worst sales year in a decade in 2023. As the smartphone industry slowly recovers, Qualcomm is facing competition on multiple fronts, with Huawei and Samsung Electronics both selling phones powered by in-house chips and Taiwan’s MediaTek challenging Qualcomm’s stronghold in mid- and premium-tier Android phones.

    San Diego, California-based Qualcomm is also expanding into other markets such as personal computers, with partners such as Dell Technologies and Lenovo Group expected to debut laptops with chips that Qualcomm claims are faster than Apple’s in-house processors.

    For the fiscal first quarter ended on Dec. 24, Qualcomm reported sales and adjusted profit of $9.94 billion and $2.75 per share, above estimates of $9.52 billion and $2.37 per share, according to LSEG data.

    In Qualcomm’s chip segment, the company forecast fiscal second-quarter sales with a midpoint of $7.9 billion, above analyst estimates of $7.86 billion. Qualcomm predicted second- quarter sales with a midpoint of $1.3 billion in its patent-licensing business, in line with estimates of $1.3 billion.

    For the just-ended fiscal first quarter, Qualcomm said chip and licensing revenues were $8.42 billion and $1.46 billion, respectively, above/below analyst estimates of $7.99 billion and $1.41 billion, according to LSEG data.

    Within its chip business, Qualcomm said that mobile handsets generated $6.69 billion in sales in the first quarter, above estimates of $6.37 billion, according to data from Visible Alpha. Automotive and Internet-of-Things chip revenues in the first quarter were $598 million and $1.14 billion, respectively, compared with analyst estimates of $518.3 million and $1.22 billion.

    (Reporting by Stephen Nellis and Max A. Cherney in San Francisco; Additional reporting by Arsheeya Singh Bajwa in Bengaluru; Editing by Sayantani Ghosh and Matthew Lewis)

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