Sep 11, 2020 StreetSignals Q3 Earnings Season Gets Underway
The market is struggling with Oracle’s ( ORCL ) interest in TikTok, but it has no trouble appreciating the resumption of growth momentum in its cloud business as it reported better-than-expected fiscal August-quarter results on Thursday, September 10.
Oracle’s earnings increased +5.4% from the same period last year on +1.6% higher revenues, but its cloud revenues increased +9% on the back of new and increased business from the likes of Zoom Video ( ZM ) and others.The company’s TikTok crush is supposedly part of its cloud push as well, but it is not clear how the TikTok crowd will sync in with its existing audience.
Oracle’s quarterly report will get counted as part of the September-quarter tally of results that will really get going when the big banks come out with results on October 20 th .But we will have a number of other important companies report August-quarter results ahead of the mid-October banks results and all of those reports will form part of our 2020 Q3 earnings season tally.
As such, the Oracle earnings release is the first quarterly report of an S&P 500 member for the Q3 earnings season.Lennar ( LEN ), Adobe ( ADBE ) and FedEx ( FDX ) are other index members that are on deck to report August-quarter results this week that will also get counted as Q3 results.
For Q3 as a whole, total S&P 500 earnings are expected to decline -23.7% from the same period last year -3.3% lower revenues.This would follow the -32.5% decline in Q2 when economic and business activities came to a halt as a result of the pandemic driven lockdowns.
The earnings outlook has been steadily improving since the start of Q3, as economic and business activities have resumed.
The chart below of how estimates for 2020 Q3 have evolved since early July clearly shows that the revisions trend has turned positive..