Oracle (NYSE:ORCL) on Thursday reported a 4.2% decline in its fourth-quarter profit, as higher costs overshadowed revenue growth.
The results fell short of Wall Street estimates for both the top and bottom lines. Oracle shares dropped 6.1% to $39.94 in after-hours trading.
The software giant earned $3.65 billion compared to $3.81 billion in the year-ago period. On a per-share basis, earnings remained level at 80 cents. Excluding one-time items, Oracle’s adjusted profit checked in at 92 cents.
Revenue increased 3.4% to $11.32 billion. Operating expenses rose 7.8% to $6.41 billion.
Analysts projected adjusted earnings of 95 cents a share and revenue of $11.48 billion.
Redwood Shores, Calif.-based Oracle has been shifting its focus to cloud services in an effort to capitalize on the growing use of Web-based programs. On Thursday, Oracle said it will continue to strengthen its focus on the cloud.
For the period ended May 31, sales of new software licenses remained flat at $9.4 billion. Software license updates and product support revenues jumped 6% to $18.2 billion. Hardware system revenue was also flat at $5.4 billion.
Oracle’s cloud business posted subscription revenue of $322 million, up 25% year-over-year.
Chief executive Larry Ellison said Oracle is now the No. 2 software-as-a-service company in the world behind Salesforce.com (NYSE:CRM).
“We plan to increase our focus on the Cloud and become number one in both the SaaS and the [platform-as-a-service] businesses,” Ellison added in a statement.