Shares of Oracle (Nasdaq: ORCL) rose 2 percent in pre-market trading after the No. 1 database developer reported third-quarter results that beat estimates.
By the close Wednesday, shares of the Redwood Shores, Calif.company fell 69 cents to $29.41, a 2.3 percent drop. Overall markets fell as well. Oracle shares had already gained 17 percent in 2012, a recovery after their tumble in December when the company's second quarter results missed estimates.
Oracle's net income rose 18 percent to $2.5 billion, or 49 cents a share, as revenue rose a more modest 3 percent, to $9 billion. The results reflected higher license sales as well as internal improvements ordered by CEO Larry Ellison, 67, who founded the company.
Oracle, a bitter rival of Germany's SAP (NYSE: SAP), whose American Depositary Receipts fell about 1 percent to $71.65, expects better results in the fourth quarter, which could range between 76 and 81 cents a share, ahead of the prior estimates of 76 cents, co-President Safra Catz said on an investor call Tuesday.
Oracle and SAP are locked in bitter battles over database as well as new software intended for the cloud, or Internet-based computing for enterprises and consumers.
Ellison criticized SAP's new Hana software, which has had fast acceptance, saying Oracle's TimesTen application, which came through acquisition, was a better product. I don't believe SAP is equipped to compete with us in a database business when we've been working on it for 10 years, he told investors.
Analyst Ross MacMillan of Jefferies, who'd downgraded Oracle shares to hold from buy on March 11, noted the net income benefited from lower tax rates, share buybacks and lower operating expenses, but noted that wasn't sufficient to change his rating.
Meanwhile, Oracle reported its cash and investments fell to about $29.7 billion from $31 billion last quarter. The company acquired RightNow Technologies, a customer relationship management company, for $1.5 billion in the quarter and last month announced it would acquire Taleo (Nasdaq: TLEO), for $1.9 billion.