Enterprise software company Salesforce saw its stock decline 2 percent on Tuesday after it reported better-than-expected earnings for the third quarter of its 2018 fiscal year, which ended on Oct. 31. The company will hold a conference call with financial analysts at 5 p.m. Eastern time.
- EPS: Excluding certain items, 39 cents per share vs. 37 cents per share as expected by analysts, according to Thomson Reuters.
- Revenue: $2.68 billion vs. $2.65 billion as expected by analysts, according to Thomson Reuters.
As a whole, the company’s revenue was up 25 percent year over year, according ot the company’s earnings statement. Almost all of Salesforce’s revenue comes from subscriptions and support, and that business segment generated $2.49 billion in revenue; analysts had expected it to hit $2.45 billion in revenue, according to FactSet. But the company’s professional services revenue for the quarter, of $193.7 million, was below the FactSet estimate of $201.4 million.
Some analysts had been positive about the company in the days leading up to earnings. “Our checks indicated that its large deal pipeline remains strong while the competitors remain at bay,” Mizuho analysts Abhey Lamba and Parthiv Varadarajan wrote in a Nov. 12 note.
In its fiscal second quarter, Salesforce beat expectations and raised its guidance for the entire fiscal year. In its fiscal third quarter, Salesforce refreshed its Service Cloud offering and went live on public cloud provider Amazon Web Services’ data center infrastructure in Canada.
In terms of guidance, the company said it expects to achieve 32-33 cents in earnings per share, excluding certain items, on revenue of $2.80-2.81 billion. Analysts had expected the company to produce 34 cents in earnings per share, excluding certain items, and $2.79 billion in revenue for the fiscal fourth quarter, according to Thomson Reuters.
Salesforce raised its guidance for its entire 2018 fiscal year, pegging it at $10.43-10.44 billion. Analysts had been expecting $10.39 billion in revenue for the full year.
Salesforce stock is up 57 percent since the beginning of the year, according to FactSet.
Source: Tech CNBC
Salesforce earnings: 39 cents a share vs expected EPS of 37 cents