Business

Salesforce earnings beat in full first quarter with Slack, but stock drop forecast

Salesforce.com Inc. posted an earnings breakthrough in the first full quarter with the participation of Slack Technologies Inc., but forecasts for the year-end dented the stock in after-hours trading Tuesday.

Sales force
CRM,
-3.97%

reported fiscal Q3 profit of $468 million, or 47 cents a share, on revenue of $6.86 billion, up from $5.42 billion a year ago. After calculating compensation based on stock and other effects, the cloud software company reported earnings of $1.27 per share, down from adjusted earnings of $1.72. million per share in the previous quarter but far exceeded estimates.

According to FactSet, analysts expect average adjusted earnings of 92 cents per share on sales of $6.8 billion.

For its fiscal fourth quarter, Salesforce projected adjusted earnings of 72 cents to 73 cents a share on revenue between $7.22 billion and $7.23 billion. Analysts on average expect earnings of 82 cents a share on sales of $7.24 billion, according to FactSet.

Salesforce raised its year-round expectations, just as they did last year first quarter and second quarter report; Management now expects full-year revenue of $26.39 billion to $26.4 billion and adjusted earnings of $4.68 to $4.69 a share, after projecting ​earnings of $4.36 to $4.38 per share on sales of $26.25 billion to $26.35 billion three months ago.

Shares of Salesforce fell more than 6% in after-hours trading shortly after the announcement of the results, after closing down 3.9% at $285.25.

Salesforce closed on Its massive acquisition of workplace communication software Slack at the end of July, just before the third quarter begins in August. The customer relationship management software company then brought Slack into the spotlight at its annual Dreamforce conference in September, showing how it plans to integrate Slack with other major acquisitions, for example. as MuleSoft and Tableau, as well as its various verticals focusing on specific industries.

For more: Salesforce’s deal for Slack poses a bigger threat to Microsoft

“Salesforce anticipates there is a significant expansion path ahead for Slack, while the nascent platform now has the added benefit of an ‘army’ ready to sell products,” said Monness analyst Brian J. , Crespi, Hardt & Co. White wrote in the earnings preview, maintaining a buy rating and $328 price target.

Salesforce didn’t beat Slack’s quarterly performance in Tuesday’s release, but CFO Amy Weaver said, “Slack saw another strong quarter and we’re pleased with the performance. of Slack in our biggest deals.”

Salesforce stock received a boost around the time of Dreamforce, but has fallen back in recent weeks after hitting a record high in early November. The stock has gone through a six-day losing streak — a long one. the most in almost two years – that pulled the price down 7.7% before breaking Monday’s trading session.

See more: For Salesforce investors, Slack must start growing super fast – and the stock price

Overall, Salesforce stock is up 28.4 percent so far this year, while the S&P 500 index
SPX,
-1.90%

increased by 23.9%.

Source link Salesforce earnings beat in full first quarter with Slack, but stock drop forecast

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