Oracle Corp.‘s (NYSE:ORCL) New Mexico data center has been delayed by a stalled natural gas pipeline, but co-CEO Clay Magouyrk said assuming every project will meet its deadline is “a bad plan.”
‘We Have a Term for That‘
During the company’s first-quarter earnings call with analysts on Thursday, Magouyrk pushed back on the idea that Oracle’s plans depend on every project hitting its deadline.
“Anyone that’s been in the business of doing construction or large-scale infrastructure development, if their plan relies on 100% achievement of every one of their deliverables, we have a term for that, it’s called a bad plan,” he said.
He added that Oracle’s data center sites typically come online in phases over several quarters rather than all at once, and a delay at one location doesn’t create a sudden, concentrated hit to revenue in any single quarter.
The New Mexico Setback
Earlier this week, DA Davidson’s Gil Luria flagged the delays as a potential headwind ahead of earnings.
Oracle’s New Mexico data center, part of its Stargate buildout with OpenAI, has been delayed after New Mexico’s State Land Office twice denied a permit for a natural gas pipeline needed to power the site, pushing its in-service date to February 2027.
Magouyrk said construction remains “definitely on track,” with Oracle instead turning to Bloom Energy Corp. (NYSE:BE) fuel cells for on-site power, which he called the “most environmentally friendly way” to generate power without waiting on the pipeline.
Oracle’s OpenAI partnership has also reportedly faced delays, with Bloomberg reporting in March that the two companies had shelved plans to expand their flagship Abilene, Texas, site after OpenAI opted to pursue newer Nvidia Corp. (NASDAQ:NVDA) chips elsewhere, a report Oracle called “false and incorrect” at the time.
Beat and Raise
Oracle reported first-quarter earnings of $1.92 per share, beating the analyst consensus estimate of $1.74 by 10.34%, according to Benzinga Pro. Quarterly revenue came in at $19.35 billion, above the Street estimate of $19.14 billion.
The company raised its fiscal adjusted EPS guidance to $8.10 from $8.05, versus the $8.07 analyst estimate, and now expects full-year revenue of more than $90 billion, above the $89.79 billion estimate.
Price Action: The stock closed 1.47% lower on Thursday at $152.94, but gained 4.13% in extended trading to $159.26.
Year-to-date, the stock has fallen 21.85% and 50.32% in the past year.
Benzinga Edge rankings indicate Oracle’s stock has a Momentum score in the 6th percentile and a Growth score in the 96th percentile.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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