On Thursday, Oracle Corp. posted cloud-computing sales for the quarter than came up short for some analysts on Wall Street, which was a setback in the effort by the company to reinvent itself around products that are internet-based. Following the reporting of the figures, shares of Oracle fell during afterhours trading.
Cloud revenue for the period ending November 30 was up 44% to over $1.52 billion. However, some analysts on Wall Street were expecting sales of $1.55 billion. Oracle’s forecast was disappointing for its cloud growth and profit for the ongoing quarter.
Oracle has been the mainstay of traditional computing software for companies, but is in a fight to catch up to today’s cloud market leaders including Microsoft and Amazon.com.
The company has hired engineers to build new products that allow customers to rent software as well as computing power from the company, and has added sales staff to transition its businesses to new offerings.
The company has made acquisitions as well such as buying NetSuite Inc. in 2016 for $9 billion to add cloud programs and clients.
However, one industry analyst said Oracle arrived late in the cloud battle and many companies and individuals already have cloud solutions they are pleased with.
Oracle shares were down by 7.3% at one point in extended trading following the release of the report. Investors were encouraged by the move by Oracle this year to cloud-based software, sending shares up 31% but Thursday’s report was not received well by those same investors.
Oracle projected that its growth in revenue from its products and services that are internet-based to be between 21% and 25% during its fiscal third period. It projected profit, excluding certain costs, to be between 68 cents and 70 cents per share, below estimates by analysts of 72 cents.
The forecast did not account for currency fluctuations that could increase profit by up to 3 cents per share, said CO-CEO Safra Catz.
As Oracle attempts to increase its customer base in the quickly growing cloud industry, Amazon has been adding new products and services that are directly aimed at enticing the traditional database customers of Oracle to switch.
Amazon unveiled several of its new offerings last month during a cloud conference held annually while mentioning the price increases at Oracle.
At the same time, Oracle offered conference goers free rides on Tesla, with a sales rep speaking to the rider about the benefits of the software Oracle offers.