Enterprise software firm Oracle has fallen short of Wall Street expectations for first-quarter revenue, hurt by competition in the cloud computing space.

But shares of the Texas-based company pared losses and were down 1.4% in extended trading after the company forecast second quarter adjusted earnings per share above expectations.

The company expects adjusted earnings per share to be between $1.09 and $1.13, above analysts' average estimate of $1.08, according to IBES data from Refinitiv.

Analysts say Oracle, whose shares have risen about 40% this year, is well positioned to benefit from cloud computing but a crowded space of rivals, including Microsoft's Azure, Amazon.com's Amazon Web Services, Salesforce.com and IBM, will keep the heat on the company.

To bolster its footing in the cloud computing space, Oracle, which counts Zoom Video Communications as one of its customers, has been ramping up investment to set up more data centers that can be rented out to clients as they expand and shift operations to the cloud.

Oracle said its two new cloud businesses, software-as-a-service and infrastructure-as-a-service, made up 25% of the company's total revenue with an annual run rate of $10 billion.

The company said its total revenue rose 4% to $9.73 billion in the quarter ended August 31. Analysts were expecting revenue of $9.77 billion.