Database giant Oracle Corp. missed expectations on revenue by a whisker as it reported its fiscal 2023 third-quarter earnings results today, sending its stock down in extended trading.

The company reported a net income for the quarter of $1.9 billion, or 68 cents per share, compared with a profit of $2.32 billion, or 84 cents per share, one year earlier. Earnings before certain costs such as stock compensation came to $1.22 per share, with revenue for the period rising 18% to $12.4 billion.

The results were mixed, as Wall Street was looking for earnings of $1.20 per share on slightly higher revenue of $12.43 billion.

Oracle also reported operating income for the third quarter of $3.3 billion, down 18% from a year earlier. Total operating expenses jumped 37% from a year before to $9.2 billion.

Oracle’s stock, which fell almost 2% in the regular session on a down day for the overall market, declined a further 4% in the wake of the report.

In a statement, Oracle Chief Executive Safra Catz (pictured) highlighted how the company’s earnings per share growth was at the high end of its own guidance, suggesting a strong performance. “Our strong quarterly earnings growth was driven by 48% constant currency growth for the total revenue of our two cloud businesses, infrastructure and applications,” she said. “Oracle’s cloud businesses now exceed $16 billion in annualized revenue.”

Cloud has indeed been a growth engine for Oracle. Diving deeper into its results, its cloud services and license support business segment delivered revenue of $8.92 billion, up 17% from a year earlier and beating the analyst consensus estimate of $8.83 billion. Cloud license and on-premises license revenue stayed flat at $1.29 billion, while hardware revenue rose 2%, to $811 million. Services revenue also grew well, by 74%, to $1.38 billion.

The last three segments all missed expectations, with Wall Street analysts forecasting $1.39 billion in cloud license and on-premises license revenue, $815.5 million in hardware sales and $1.43 billion from services.

Once again, Oracle officials cited the contribution of healthcare company Cerner, which was acquired for $28 billion last June.

“Since June of last year when we acquired Cerner, that business has increased its healthcare contract base by approximately $5 billion,” said Oracle Chairman and Chief Technology Officer Larry Ellison. “While we are pleased with this early success of the Cerner business, we expect the signing of new healthcare contracts to accelerate over the next few quarters.”

Holger Mueller of Constellation Research Inc. said Oracle is showing its resilience with growth of almost 20% and its cloud bets all growing even faster. “It shows that Oracle is transforming and heading in the right direction,” he added. “But the growth came at a cost because Oracle is less profitable than it was a year ago, delivering 20% lower earnings per share. Now all eyes are on the fourth quarter, which is traditionally Oracle’s strongest of the year.”

Oracle is clearly hoping its cloud business will continue to accelerate. During the quarter, the company announced plans to invest more than $1.5 billion in building out its cloud data center infrastructure in Saudi Arabia over the next few years. It will also be looking to add more high-profile customers after agreeing a seven-year strategic partnership with Uber Technologies Inc.

Oracle said its board of directors had agreed to hike the quarterly dividend paid to shareholders by 25%, to 40 cents per share.

Looking to the fourth quarter, Catz told analysts that the company is forecasting earnings of between $1.56 and $1.60 per share on revenue of between $13.62 billion and $13.85 billion. That compared with Wall Street’s consensus estimate of $1.47 per share in earnings and $13.75 billion in revenue.

Photo: Oracle PR/Flickr