Oracle revenue misses as cloud growth falls short of estimates

(Reuters) - Business software maker Oracle Corp ORCL.N reported quarterly revenue on Monday that missed analysts' estimates as sales from its cloud business fell short of Wall Street expectations, sending its shares down nearly 6.3 percent after market.

FILE PHOTO - The sign outside Oracle's offices in Broomfield, Colorado, U.S., March 15, 2017. REUTERS/Rick Wilking

Cloud business revenue rose 31.7 percent to $1.57 billion, but fell short of the average analysts’ estimate of $1.59 billion, according to Thomson Reuters I/B/E/S.

A late entrant into the rapidly growing cloud-based software business, Oracle has aggressively stepped up efforts to play catch up with rivals such as Inc AMZN.O, Microsoft Corp MSFT.O and Inc CRM.N.

Last year Oracle launched its autonomous database cloud to compete with Amazon Web Services (AWS).

“The challenge for ORCL is with its database business, namely getting its database customers to choose Oracle Cloud instead of deploying their Oracle licenses on AWS, Azure, or Google,” Steve Koenig, analyst at Wedbush Securities said.

Revenue from Oracle’s traditional software licensing business, its largest, rose nearly 4 percent to $6.42 billion.

Oracle forecast current-quarter adjusted profit between 92 cents and 95 cents per share above estimates of 90 cents.

The Redwood City, California-based company reported a net loss of $4.02 billion, or 98 cents per share, in the third quarter ended Feb. 28, compared to a profit of $2.24 billion, or 53 cents per share, a year earlier.

Oracle recorded a charge of $6.9 billion in the reported quarter, due to the recently enacted U.S tax law.

Excluding items, the company earned 83 cents per share. Total revenue rose 6.1 percent to $9.77 billion.

Analysts were expecting a profit of 72 cents per share on revenue of $9.78 billion.

Reporting by Laharee Chatterjee in Bengaluru; Editing by Shounak Dasgupta