Salesforce.com Shares Jump After Strong Earnings Report
By David Zielenziger | November 22, 2012 7:31 AM EST
Shares of Salesforce.com (NYSE: CRM), the customer-relationship management software developer, jumped nearly 9 percent Wednesday after the company reported stronger-than-expected third-quarter results.
In late trading, Salesforce.com shares rose $12.18 to $158.08 after touching $158.39 earlier.
The San Francisco-based company reported operating earnings of 33 cents per share, a penny ahead of estimates, as revenue rose 35 percent to $788 million, about $12 million above analyst predictions.
CEO Marc Benioff cited “strong customer response to our next-generation social and mobile cloud technologies. Going forward, fourth-quarter operating earnings are expected to rise to 38 cents to 40 cents per share on revenue of $825 million to $830 million, 31 percent above prior-year results.
Salesforce.com took various charges, including a one-time $149 million charge for a tax valuation allowance. On a net basis, the company reported its loss widened to $220.3 million, or $1.55 per share, from $3.8 million, or 3 cents, a year earlier.
Analysts said they were pleased, especially because the company expects higher earnings in the current quarter.
At Jefferies, analyst Ross MacMillan termed the revenue “pretty impressive” given the lackluster U.S. technology sector. He reiterated a “buy” recommendation, with a price target of $180.
Nomura Research's Rick Sherlund, with a “buy” rating and target of $160 for Salesforce.com, also said the revenue gains were good.
Besides customer-relationship management, Benioff has been leading the company into other fields, such as human resources and social media marketing, where it competes against Oracle Corp. (Nasdaq: ORCL), LinkedIn (NYSE: LNKD) and Facebook (Nasdaq: FB). In July, Salesforce.com acquired private Buddy Media for $689 million in cash and shares to bolster its social marketing offerings.
Benioff is a former senior VP of Oracle, whose CEO, Larry Ellison, controls rival NetSuite (NYSE: N), of San Mateo, Calif. Shares of NetSuite rose about 3 percent, to $60.24, in late trading, in apparent sympathy.
Salesforce.com could well make further acquisitions: As of Oct. 31, it reported holding cash, investments and securities exceeding $1.4 billion.
To contact the editor, e-mail:
Most Popular Slideshows
- George Clooney And Amal Alamuddin's Wedding In Venice: Photos Of Groom And His Family, Friends [Slideshow]
- NFL Recap - Week 4: Green Bay Packers 38, Chicago Bears 17 [PHOTOS]
- NFL Recap: New York Giants 45, Washington Redskins 14 [PHOTOS]
- Photos Of George Clooney And Amal Alamuddin, They Get Married Again On Monday [Slideshow]
Join the Conversation
- Tourre on stand says email in SEC case 'not accurate'
- Syrian authorities blocking access to needy in Homs - Red Cross
- Faith in European Union at low ebb, EU poll says
- Former UBS banker gets 18 months, $1 million fine, for muni bid-rigging scheme
- U.S. judge halts challenges to Detroit's bankruptcy bid
- 3 Reasons to Get the Samsung Galaxy Note 4 Instead of the iPhone 6
- iPhone 6 vs Moto G 2014: Motorola’s Budget Smartphone Takes On Apple’s Premium Smartphone
- Google HTC Nexus 9 Tablet October 24 Launch Date Benefits Many
- Galaxy Note 4 vs Nexus 6: Which Smartphone Dominates
- MH 370 Search In Ocean To Intensify With Hi Tech Ships Joining The Plane Hunt From October
- New Windows OS Is Not Windows 9, Microsoft To Launch Windows 10 As New OS Build
- Nexus 7 Tips and Tricks