Wall Street Breakfast Podcast: No Reward For Oracle’s Beat

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Oracle (ORCL) slips even as Q4 results, guidance top estimates. (00:13) Xbox (MSFT) to reboot with layoffs, budget cuts — Bloomberg. (01:16) Eyes on the sky: Walmart (WMT) and Alphabet’s Wing (GOOGL) (GOOG) expand their drone delivery program. (02:08)

This is an abridged transcript.

Oracle (ORCL) is down 9% in early trading after falling more than 2 percent on Wednesday.

The IT giant reported fiscal fourth-quarter results and guidance that topped Wall Street’s forecast.

For the period ending May 31, Oracle said it earned an adjusted $2.11 per share as revenue rose 21% year-over-year to $19.18B. Analysts had expected adjusted earnings of $1.97 per share on $19.09B in revenue.

Oracle also highlighted a massive $638B remaining performance obligation backlog, fueled by large AI contracts, and guided FY2027 revenue to $90B, above consensus.

However, declines in software license and support revenue, along with plans to raise $40B through debt and equity financing to fund AI data center expansion, appeared to overshadow the strong quarter and outlook.

Microsoft’s (MSFT) Xbox is planning major layoffs at the end of the company’s fiscal year on June 30.

According to sources cited by Bloomberg, this is part of a sweeping reorganization of the business under new CEO Asha Sharma.

The division also plans to “significantly slash” budgets for marketing and other areas.

Sharma has been quoted as saying the cuts are necessary as Xbox is “not in a healthy spot” and that the business had plummeted to a 3% “accountability margin,” which refers to the metric Microsoft (MSFT) uses to measure its profit margin.

The reorganization comes as Xbox struggles to regain relevancy among gamers after several years of price hikes, cancelled games, shuttered studios, and releasing some of its video games on competitors’ consoles to augment revenue.

Wing and Walmart (WMT) confirmed seven new major metro areas that will join the nation’s largest drone delivery network.

Wing and Walmart plan to expand to Memphis, New Orleans, Philadelphia, Phoenix, San Diego, San Francisco Bay Area, and Salt Lake City.

This expands their network to nearly 20 markets across the country.

It’s part of a broader plan to build a network of 270 locations.

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Palantir CEO warns AI firms are ‘upsetting enterprise clients’ now

Catalyst watch:

Shareholders with Two Harbors Investment (TWO) will vote on the amended merger agreement with CrossCountry Mortgage.
Nvidia (NVDA) CEO Jensen Huang has been invited to testify to the Senate about the company’s China business and U.S. export controls.
Notable investor events include Honeywell’s (HON) Investor Day, DXC Technology’s (DXC) Investor Day, and EnerSys’ (ENS) Investor Day event.

Stock index futures are higher before the bell as Washington said it has “completed” strikes against Iran.

Crude oil is down 0.5% at $89. Bitcoin is up 2% at $62,000. Gold is up 0.3% at $4,085.

The FTSE 100 is up 0.5% and the DAX is down 0.3%.

The biggest movers for the day premarket: Navan (NAVN) +19% – Shares jumped after the travel and expense management platform reported a strong FQ1 beat and raised its full-year outlook.

Economic calendar: