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Oracle Corp.’s shares took a small hit late today even though the database and business software giant posted better-than-expected quarterly results and guidance.

The company reported a profit before certain costs such as stock compensation of 87 cents per share on revenue of $9.6 billion for its fiscal third quarter. That compared well with Wall Street’s forecast, with analysts expecting the company to report earnings of just 84 cents per share on revenue of $9.59 billion.

Oracle’s revenue fell 1 percent compared from a year ago in U.S. dollar terms, but rose 3 percent in constant currency.

As for guidance, Oracle Chief Executive Officer Safra Catz said the company expects an adjusted profit of $1.05 to $1.09 a share, with revenue flat to down 2 percent. Wall Street was looking for $1.05 per share on a 1 percent revenue drop.

The numbers were relatively strong, but not enough to address investors’ ongoing concerns about Oracle’s ability to transition its customers to a cloud-based subscription model. That was reflected in its stock, which fell more than 3 percent in after-hours trading. Update: In Friday trading, shares fell just 0.2 percent.

Oracle has slowly but steadily been adding more cloud versions of its database products to its portfolio, partly to try to steal customers from rivals such as Amazon Web Services Inc. More important, the company is also hoping to persuade existing customers to replace their on-premises software with cloud-based systems, but most analysts believe it hasn’t fared well enough in that regard.

For example, Oracle’s Cloud Services and License Support revenues came to $6.7 billion in the quarter, up 1 percent from a year ago. On the face of it, that looks good, but Bloomberg said a large portion of that total is likely derived from maintenance fees for traditional on-premises software. Meanwhile, Oracle’s quarterly cloud license and on-premises license sales fell by 4 percent, to $1.25 billion, which Bloomberg said is a sign that it’s having difficulties persuading new customers to commit.

Analyst Holger Mueller of Constellation Research Inc. said Oracle impressed this quarter but the numbers can’t distract from the fact that many enterprises are slow to transition to the cloud.

“As long as Oracle manages to transform its on-premises customers to cloud customers on the database side, it will do well and keep investors happy,” Mueller said. “Should that conversion engine sputter, however, alarm bells will be ringing.”

Oracle is making some progress in that direction. Founder and Chief Technology Officer Larry Ellison (pictured) pointed to the success of its new Autonomous Database, which is a cloud-based version of its main database offering that now counts almost 1,000 paying customers. About 4,000 more are also testing the software, Ellison said.

“It’s early days, but this is the most successful introduction of a new product in Oracle’s 40-year history,” Ellison said in a conference call. “The future of Oracle’s Cloud Infrastructure business rests upon our highly secure Gen2 Cloud Infrastructure featuring the world’s first and only Autonomous Database.”

The traction that Oracle’s Autonomous Database is getting is good news for the company, according to Charles King, principal analyst at Pund-IT Inc. He told SiliconANGLE that the offering helps Oracle to differentiate itself in what is becoming an increasingly crowded cloud database market.

Still, investors were likely wary of the slight decline in Oracle’s overall revenue in dollar terms, which was one of two reasons for today’s stock drop, King said.

“The other reason is the degree to which Oracle has been buying back shares, reporting repurchases of $29.89 billion in the past three quarters,” King said. “That’s more than four times the share repurchases the company reported during the same nine-month period last year. If Oracle’s revenues perk up later this year, the concerns of analysts and shareholders should be assuaged.”

Photo: Robert Hof/SiliconANGLE