Oracle stock drops as investments drag down profit

Safra Catz, then co-chief executive officer of Oracle Corp., speaks during the Oracle OpenWorld conference in San Francisco on Sept. 20, 2016.

The database software maker reported fiscal third-quarter earnings that failed to meet analysts' expectations and its shares fell more than 6% in extended trading.

The company did it.

• Earnings: $1.13 per share, adjusted, vs. $1.18 per share as expected by analysts, according to Refinitiv.
• Revenue: $10.51 billion, vs. $10.51 billion as expected by analysts, according to Refinitiv.

According to the statement, revenue increased 4% from a year earlier. Net income fell to $2.32 billion.

Net income fell due to two investments. The company 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.

We remain confident that our investments in these two cutting-edge technology companies will deliver very strong returns for us.

The company's short-term deferred revenue came in below the StreetAccount consensus.

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

The fiscal fourth quarter is expected to see 3% to 5% revenue growth, with adjusted earnings per share expected to be between $1.35 and $1.39. The analysts had been looking for revenue of $11.76 billion and a profit of $1.38 per share. The guidance does not include contributions from Safra Catz, the CEO of Oracle.

Executives will discuss the results with analysts on a conference call. Time.

The stock of Oracle was down 12% by the time of the after-hours move. The S&P 500 index has dropped over the last year.

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