Published - March 10, 2023 @ 11:01 AM (EET)

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After enterprise tech giant Oracle (NYSE:ORCL) reported financial results for its 2023 fiscal third quarter that failed to meet expectations for higher growth, the stock dropped nearly 5% in after-hours trading Thursday.

While overall sales jumped 18% year-over-year during its latest quarter, the company earned $1.22 a share, excluding one-time items, on revenue of $12.4 billion. Analysts had forecast it to generate $1.20 a share, on $12.42 billion.

Like many leading tech companies, a rally in the US dollar slubbered Oracle's bottom line.

Net income fell from $2.32 billion to $1.90 billion in the quarter that ended Feb. 28, while Oracle's highly watched cloud segment, which the company has been trying to expand, climbed 45% on revenue of $4.1 billion. 

Though its cloud infrastructure has been relatively behind the market, analysts have been optimistic its aggressive marketing is gaining customers and helping the company accelerate growth. In recent quarters, Oracle's larger competitors Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN), have witnessed growth slowdowns in its cloud divisions.  

Total operating expenses increased 37% year-over-year to $9.2 billion.

LOOKING AHEAD

For its fourth quarter, Oracle expects revenue to grow between 15% and 17%, broadly in line with analysts' estimate of 16.2%. In addition, the company forecast adjusted profit per share of between $1.56 to $1.60, above market predictions of $1.46.

Over the last year, Oracle has been up 14% during the past 12 months, making it one of the steadiest tech stocks.

Bloomberg Intelligence analyst Anurag wrote, "We continue to believe the company is navigating the slowdown better than most rivals."

Meanwhile, Oracle's Board of Directors declared a quarterly cash dividend of $0.40 per share of outstanding common stock, reflecting a 25% increase over the current quarterly dividend of $0.32. Chairman of Oracle's digital health records provider Cerner, Larry Ellison, "did not participate in the deliberation or the vote on this matter."

Cerner generated sales of $1.5 billion in the period.