Oracle (ORCL, Financial) reported its fourth quarter and full-year earnings results on June 16. The company’s earnings showed strong continued growth in cloud computing demand. However, revenue across its other core business segments were lower, resulting in lower total sales for the fourth quarter and full year.
For the fourth quarter, the company reported revenue of $10.6 billion with EPS of 81 cents. Total revenue was down 1% from the comparable quarter and EPS was higher by 4%. For the full year, the company reported total revenue of $37.1 billion and EPS of $2.61. Revenue for the year was down 3% and EPS was 6% lower.
For the full year, Oracle grew its cloud revenue by 36% from $2.1 billion to $2.9 billion. Cloud software as a service and platform as a service combined for revenue growth of 49% with an increase from $1.5 billion to $2.2 billion. Cloud infrastructure as a service grew revenue 6% from $608 million to $646 million.
Oracle’s full year 2016 results provided another example of how cloud computing demand is significantly growing in the industry. However, its market share continues to be dispersed widely across a range of companies whose cloud computing services account for a minority share of total revenue.
The full range of companies offering cloud computing services can best be evidenced by the ISE Cloud Computing Index.
Within this universe companies such as Oracle and Amazon (AMZN, Financial) have only small segments of their business devoted to this substantially growing market. Oracle’s cloud computing revenue represented 8% of its total sales in 2016. For Amazon, cloud computing revenue represented 9% of total sales in the first quarter of 2016.
In a CNBC report following the company’s earnings results, industry analyst Scott Kessler discussed the company’s growth in cloud and gave his perspective on the company’s overall performance.
Disclosure: I do not own any shares of any stocks mentioned in this article.
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