Salesforce, the customer relationship management (CRM) platform provider and cloud-based software behemoth, added to this uneven earnings season with its fiscal second-quarter results that disappointed investors. The real estate company released earnings and revenue that topped analyst estimates. Its worse than expected guidance was enough to send shares plummeting 4% in after-hours trading. Salesforce is not immune to the worst tech market on record, with shares cratering 23% in a year. This huge decline leaves the company worse off than all but one other stock in the Dow, and far behind its large-cap tech brethren.
Salesforce just reported a remarkable net income of $1.89 billion, or $1.96/share. This is a dramatic jump from last year’s net income of $1.43 billion, or $1.47/share. The company blew the results out of the water. Analysts had expected adjusted EPS in the range of $11.27 to $11.33. In spite of this good news, Salesforce’s guidance for soon-coming quarters spooked investors.
Marc Benioff, co-founder and new CEO of Salesforce, laid out a big new financial target for the company. They’re aiming for adjusted earnings per share of $11.33 to $11.37 and revenue of $41.1 billion to $41.3 billion for the fiscal year. This rosier forecast keeps its full-year revenue forecast at around 12.7 billion dollars but raises its anticipated earnings above earlier projections.
The rough outlook was made all the worse by Salesforce’s shocking missteps over the past fiscal second quarter. While the company did raise prices across their portfolio, that’s likely only a part of the reason investors are worried about slowing top-line growth moving forward. Salesforce will add Informatica for $8 billion. This strategic move will undoubtedly help it sharpen its data management savvy.
Salesforce will host a conference call at 5 p.m. ET today to talk through these news first with industry analysts. They’ll provide more glimpses into their performance and strategic direction moving forward. Now, Salesforce is starting to feel the pressure in a rapidly shifting, intensely competitive landscape. It fails to drive through a difficult economic climate, confirmed by the patchy performance.