Oracle Falls After Profit Misses Estimates, Apps Growth Slows

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(Bloomberg) — Oracle Corp. shares declined after reporting slowing growth in its corporate finance applications and quarterly profit that missed estimates.

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Earnings, excluding some items, were $1.13 a share, missing analysts’ average estimate of $1.18 a share, according to data compiled by Bloomberg. Oracle said profit was lowered by 5 cents a share because of a stock price decline at gene-sequencing company Oxford Nanopore Technologies and an operating loss at Ampere, a maker of server chips.

Revenue rose 4.2% to $10.5 billion in the period ended Feb. 28, the Austin, Texas-based company said Thursday in a statement, in line with estimates. Cloud revenue, a closely watched metric indicating how well Oracle is doing in moving customers out of on-premises systems, rose 24% to $2.8 billion.

Sales from Oracle’s enterprise resource planning products, which include Fusion ERP and NetSuite, rose 33% and 27% respectively, indicating slowing demand for upgrades to back-office software that helps manage functions like accounting and procurement. The tools grew 35% and 27% in the previous period.

Oracle has been trying for years to expand its cloud computing business and close a gap in market share with the top three providers, Amazon.com Inc., Microsoft Corp. and Alphabet Inc.’s Google. In December, Oracle said it had agreed to acquire health information technology vendor Cerner Corp. for about $28.3 billion. Investors are eager to hear how the acquisition will support Oracle’s ambitions in the health care industry, apart from moving data from Cerner — which previously struck a partnership with Amazon Web Services — to Oracle’s own data centers.

“Besides the big name and the access, what else is there for Oracle? Everyone is waiting to see,” said Trevor White, an analyst at Nucleus Research.

Oracle shares fell about 6% in extended trading after closing at $76.65 in New York. The stock has declined 16% since the Cerner deal was announced.