NEW YORK (AP) -- Oracle's stock is lower in premarket trading Friday after co-founder Larry Ellison announced that he is stepping aside as CEO after 37 years at the helm of the business software maker. The company's first-quarter results missed Wall Street's view, and its second-quarter adjusted earnings forecast was below analysts' estimates.
Ellison will be handing over his job to his two top lieutenants, Safra Catz and Mark Hurd, who become co-CEOs. Eillison is taking over as Oracle's executive chairman, replacing Jeff Henley in the position, and will oversee the engineering departments as chief technology officer.
Ellison remains Oracle's biggest shareholder with a 25 percent stake in the Redwood Shores, California, company that accounts for most of his $51 billion fortune.
On Thursday Oracle reported first-quarter adjusted earnings of 62 cents per share on revenue of $8.6 billion. Analysts polled by Zacks Investment Research expected earnings of 64 cents per share on revenue of $8.78 billion.
Oracle anticipates second-quarter adjusted earnings between 66 cents and 70 cents per share, with revenue flat to up 4 percent. Analysts surveyed by FactSet predict earnings of 74 cents per share.
Brian White of Cantor Fitzgerald said in a client note that Oracle's first-quarter performance missed his estimates, while its second-quarter guidance was "light."
White maintained a "Buy" rating and lowered Oracle's price target to $48 from $50.
William Blair's Jason Ader said that the executive changes are not expected to have any material impact on Oracle's management or operations. He said the company's first-quarter results were soft in part because of weakness in the legacy hardware portfolio and lower sales from its services division. Ader called the second-quarter guidance disappointing.
The analyst kept a "Market Perform" rating.
Shares of Oracle Corp. declined $1.28, or 3.1 percent, to $40.27 in premarket trading about an hour and a half before the market open.