Oracle is flat year-to-date vs. a soaring market because of sluggish sales and a tough environment for enterprise software. Revenue was flat for the second straight quarter, and this time Larry Ellison & Co. couldn’t blame the sales force like they did after missing earnings in March.
And according to Capital IQ data, Oracle hasn’t grown its revenue by more than about 3% year-over-year in a single quarter since its first-quarter 2012 numbers hit the market about two years ago.
Oracle insists it is ramping up sales, giving cloud players a run for their money and moving big into networking on the heels of its $1.7 billion acquisition of Acme Packet. But thus far, the efforts haven’t borne much fruit and competitors are just as hungry for growth.
With the broader headwinds facing the IT sector and the continued disappointment on the top line, investors might not want to be too patient with Oracle’s plans — especially considering a measly 1.5% dividend.
Oracle sure isn’t going bankrupt with an entrenched business and $32 billion in cash, so bottom fishing is tempting in hopes of a turnaround. But nothing in the numbers indicates that turnaround will happen anytime soon.
Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor’s Guide to Finding Great Stocks. Write him at firstname.lastname@example.org or follow him on Twitter via @JeffReevesIP. As of this writing, he did not own a position in any of the stocks named here.