Why Tonight's Biggest Earnings Releases Have Macro Implications

Oracle Corporation (NYSE: ORCL) and Adobe Systems Incorporated (NASDAQ: ADBE) will report their quarterly numbers Thursday after market, and Wunderlich expects the prints to have macro implications given reported weakness in deal activity.

Macro Influence

“Overall, the key focus from a macro perspective will be on commentary around ADBE and ORCL’s deal activity in November as we have begun to see signs of weakness early in 4Q based on early commentary from the likes of Workday Inc (NYSE: WDAY) and Cornerstone OnDemand, Inc. (NASDAQ: CSOD),” analyst Ryan MacDonald wrote in a note.

The analyst recalled Workday’s comments that it saw a few large deals get pushed out of November in the financial services segment as Brexit impact delayed purchasing decisions internationally.

Similarly, Cornerstone OnDemand reported lags in European enterprise orders as data privacy and data sovereignty issues between the U.K. and EU have yet to be resolved.

Oracle Expectations

Meanwhile, MacDonald expects Oracle to report second-quarter revenue and EPS in line with consensus expectations of $9.14 billion and $0.60 as the company continues to build momentum in the cloud with strong HCM adoption.

However, the analyst projects stronger-than-expected forex headwinds, while investors will focus on the integration of NetSuite as it would materially impact cloud growth expectations for 2017.

Adobe Expectations

For Adobe’s fourth quarter, MacDonald forecast slight upside to consensus revenue and EPS estimates of $1.59 billion and $0.86, driven by strong Creative Cloud adoption due to two promotions during the quarter.

The analyst has a Hold rating on both Oracle and Adobe shares.

At last check, shares of Oracle were up 0.62 percent to $41.13 and Adobe gained 0.23 percent to $106.05.