Salesforce beats estimates on cloud-based services
NEW YORK: Salesforce.com easily beat analysts’ estimates for quarterly earnings and forecast 2020 revenue above expectations, as it benefits from more companies turning to its cloud-based services.
The company’s shares rose 5.8 per cent in extended trading, set to add to their about 25 per cent gain this year. The results and forecast are expected to support other cloud computing stocks, which took a knock earlier this month on concerns of peaking demand.
Salesforce remained the worldwide customer relationship management market leader in the first half of 2018 with a 20.3 per cent of total revenue share, according to research firm IDC, but is facing rising competition from Microsoft Corporation, Oracle and SAP.
San Francisco-based Salesforce said it expects full-year 2020 revenue between $15.90 billion and $16 billion. Analysts were expecting $15.83 billion, according to IBES data from Refinitiv.
“The company guided for revenue above consensus estimates for next year, which is the first time they have done that in three years,” said Alex Zukin, an analyst with Piper Jaffray & Co.
The beat and forecast also helped overshadow light current-quarter expectations. The company said it expected fourth quarter profit of between 54 cents and 55 cents per share, on revenue of $3.55 billion to $3.56 billion.
Analysts on average are expecting a profit of 57 cents and revenue of $3.52 billion.
“The magnitude of the thirdquarter beat was so big and more than offsets the guidance,” said Scott Berg, an analyst at Needham & Co.