Oracle profit forecast fails to impress; shares fall

Business software maker Oracle Corp delivered a third-quarter profit forecast that did not quite meet analysts' expectations, and the company's shares fell about 1 percent in extended trading.

Oracle forecast third-quarter profit of about 63-66 cents per share, with revenue flat or up 3 percent which translates to USD 9.33 billion-USD 9.61 billion. The company's shift from licensing software to cloud-based subscriptions has squeezed its margins.

Analysts on average were expecting profit of 65 cents per share on revenue of USD 9.28 billion, according to Thomson Reuters I/B/E/S.

"This is a softer outlook than the Street was expecting and speaks to the massive growth challenges ahead," FBR Capital Markets analyst Daniel Ives said.

Oracle, like other established technology companies, has been moving its business to the cloud-based model, essentially providing services remotely via data centers rather than selling installed software.

In the second quarter ended November 30, revenue from the company's cloud-computing software and platform service rose 34 percent to USD 484 million.

Total revenue fell 6.3 percent to USD 8.99 billion, missing analysts average estimate of USD 9.06 billion, according to Thomson Reuters I/B/E/S.

Oracle's second-quarter net income fell to USD 2.2 billion, or 51 cents per share, from USD 2.5 billion, or 56 cents per share, a year earlier.

Excluding items, it earned 63 cents per share, beating average analysts' estimate of 60 cents per share.

Up to Wednesday's close, Oracle's stock had fallen 13.5 percent this year.