Many Of Oracle's Employees Are Not Getting Their Bonuses, Says Analyst

Oracle reports its third-quarter earnings on Tuesday and analysts have hopes for a good quarter.

They are expecting 4% growth in revenue over the year-ago quarter, and EPS to be $0.70, up from $0.65.

If the company exceeds these targets, it will be a two-in-a-row beat.

Oracle could really use that. It missed revenue expectations for the prior three quarters in a row, an almost unheard of series of misses for the company as it struggled to stop its hardware business from shrinking.

With revenue soft, Oracle spent most of 2013 in cost-cutting mode. That meant that many Oracle employees didn't get their bonuses, Wall analyst analyst Steve Koenig, of Wedbush said in a research note published last week:

"Our checks suggest FY13 bonuses were trimmed or eliminated for many employees across the company , which augurs wells for cost control, but not so much for ORCL's ability to attract and retain talent."

Koenig clarified to Business Insider, "It's anecdotal, but we heard from more employees that they are not getting their fiscal '13 bonuses, which ended [last] May. And it seems that that sort of thing is more frequent than it has been in the past. [This affects] people in marketing, internal development, etc."

The company has been beefing up its revenue numbers with cloud acquisitions. However Koenig says that once those acquisitions get absorbed, Oracle hasn't been making much hay with them.

"Some of the SaaS acquisitions they've done don't look they are generating a whole lot of growth. I've heard that RightNow is doing really well, but I conclude that Taleo is probably not growing well," he says. Oracle bought customer service cloud RightNow for $1.5 billion in 2011 and bought human resource cloud Taleo for $1.9 billion in 2012.

He says that if you strip out the revenue from whatever cloud acquisition Oracle has most recently completed, "cloud revenue out stays flat."

Still, Koenig isn't panning the stock altogether. He maintains a "neutral" rating and target price of $40. The stock is trading at about $38 now.

He thinks Oracle is going to beat consensus expectations tomorrow, and that it's doing an especially good job in selling its the latest version of its bread-and-butter product, the database. Oracle released a new version of its database, 12c, last summer. 12c is designed for cloud computing applications, an area where enterprises are investing heavily.

Oracle declined comment.