Oracle Corp. (ORCL) announced its next quarterly dividend for shareholders of record on the ex-dividend date of Jan. 3. A cash dividend payment of $0.15 per share is scheduled to be paid Jan. 26, 2017. It is the eighth consecutive quarter that Oracle paid a dividend of $0.15.
The dividend will come more than a month after the firm topped earnings and revenue expectations in the fiscal second quarter. In the second quarter, Oracle reported that cloud-based revenue surged to $1.1 billion, a figure that represented an 81 percent boost compared to the same period in 2015. (See also: What Oracle’s Aggressive Cloud Initiative Means.)
Looking ahead, analysts are concerned that the firm could see a decline in quarterly profits despite an uptick in revenue. According to Estimize, consensus expectations for the fiscal third quarter are $0.64 per share. That figure represents a three percent decline from the same period in 2016. Analysts project quarterly revenue of $9.243 billion, a three percent gain from the third quarter of 2016.
Oracle shares finished 2016 up 5.28 percent. That figure lagged against the S&P 500 return of 9.54 percent. Despite announcing a $10 billion buyback in May 2016, the stock lagged the broader market due in part to exchange rates and rising competitive threats. (See also: Year in Review: Oracle Corporation.)
One of the key issues that could carve into the company’s profitability is the surging dollar, which is sitting near a 14-year high. Although the company has seen strong revenue growth due to cloud-computing demand, fluctuating exchange rates have cut into its profits. (See also: The Impact Of Currency Conversions.)
According to Reuters, more than half of Intel’s revenue comes from foreign countries. Market Realist writes that 45 percent of the firm’s revenue comes from the EMEA (Europe, the Middle East and Africa) region alone. In Europe, both the Euro and the British pound slumped against the U.S. dollar in 2016.
The Federal Reserve has planned at least three interest rate hikes in 2017. The tightening of U.S. monetary policy stands in contrast to further monetary accommodation by the European Central Bank to bolster the European economy. Goldman Sachs's chief economist Jan Hatzius predicted on Jan. 9 that the U.S. dollar will likely hit parity against the Euro later this year. A declining Euro could continue to weigh on Intel's profitability.