Oracle Shares Slide on Weaker Than Expected Q3 Outlook

American multinational computer technology corporation Oracle saw its shares slide on Thursday as the company reported financial results for the third quarter and missed on earnings.

Oracle, which earns the bulk of its revenues from its cloud services and license support unit, missed Street earnings forecasts by 5 cents with an adjusted second bottom line of $1.13 per share.

The stock initially slid 6% in extended trading before rebounding.

For the quarter, Oracle reported earnings per share of $1.13, adjusted. This is compared to $1.18 per share as expected by analysts, according to Refinitiv.

Revenue at $10.51 billion was compared to $10.51 billion as expected by analysts, according to Refinitiv.

Oracle’s revenue increased 4% from a year earlier in the quarter, which ended Feb. 28, according to a statement. Net income declined 54% to $2.32 billion.

Net income dropped due to two investments.

Oracle said profit was hurt by the tumbling share price of gene-sequencing company Oxford Nanopore and an operating loss at Arm server chip maker Ampere Computing, a private company.

“We remain confident that our investments in these two cutting-edge technology companies will deliver very strong returns for Oracle,” the company added.

In the quarter Oracle announced its intent to acquire Cerner, a developer of software for managing health records, for $28.3 billion in cash.

Looking ahead the company expects $1.35 to $1.39 in adjusted earnings per share and 3% to 5% revenue growth in the fiscal fourth quarter. Analysts polled by Refinitiv had been looking for $1.38 per share and $11.76 billion in revenue.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.