Salesforce.com profit beats estimates, shares drop after hours
Reuters
Published Aug 22, 2017 07:42PM ET
Salesforce.com profit beats estimates, shares drop after hours
By Salvador Rodriguez
(Reuters) - Salesforce.com Inc (NYSE:CRM) posted a quarterly profit that narrowly beat analysts' estimates as it invested heavily to fend off competition in the cloud-based software sector.
Shares of the company fell 1 percent after the bell on Tuesday after closing at $92.95 on the New York Stock Exchange.
The San Francisco-based tech giant's net income grew to $241 million, or 33 cents per share, from $170 million, or 24 cents per share, a year earlier.
Analysts were expecting net income of $229 million for the quarter.
The company also reported deferred revenue - a key metric for the subscription-based software business - of $4.82 billion for the quarter, up 26 percent on the year, beating expected revenue of $4.69 billion, according to financial and data analytics firm FactSet.
Revenue from Sales Cloud, the company's flagship product, rose 17.4 percent to $886.4 million, while total revenue jumped 25.8 percent to $2.6 billion.
"Salesforce's growth is impressive," said Joe Tenebruso, analyst for Motley Fool. "There aren't many businesses that sizes that are growing so rapidly."
The cloud-based software maker has boosted spending on research and development as well as marketing and sales as it faces intense competition from companies including Oracle Corp (NYSE:ORCL) and Microsoft Corp (NASDAQ:MSFT).
"In the next few years, it's going to be a tough battle in the cloud," said Tom Taulli, InvestorPlace.com analyst. "Salesforce has done a great job so far, but the competition has gotten better."
Total operating costs rose 19.7 percent to $1.84 million in the second quarter ended July 31.
On an adjusted basis, the company earned 33 cents per share.
Analysts on average had expected a profit of 32 cents and revenue of $2.51 billion, according to Thomson Reuters I/B/E/S.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.