Oracle forecast lower-than-expected quarterly profit as growth in its cloud-based business fails to make up for weakness in its traditional software offerings.

Total cloud revenue rose 59 per cent to $969 million in the first quarter ended August 31st. However, the company’s traditional software business, which offers higher margins, continued to suffer. Sales of new software licenses fell 10.5 per cent to $1.03 billion.

For the second quarter, the company said it expected adjusted earnings of 59-62 US cent per share and revenue growth of up to 3 per cent. Analysts were expecting adjusted earnings of 65 cents per share.

The company said its latest quarter was also weighed down by a strong dollar, which reduced revenue from various businesses by 1 to 3 per cent.

Total revenue edged up 1.7 per cent to $8.6 billion. However, it rose 3 per cent on a constant currency basis. Oracle’s net income rose to $1.83 billion, or 43 cent per share, from $1.75 billion, or 40 cents per share.

Analysts on average had expected revenue of $8.7 billion and a profit of 58 cent per share. – Reuters