Salesforce Stock Plummets After Rising Profits. Here’s why.
stock was losing ground after cloud-based enterprise software company posted strong profits. The mixed forecast apparently left some investors disappointed.
The company also announced that Bret Taylor, who served as president and chief operating officer, was promoted to co-chief executive with Marc Benioff and vice-chairman of the company’s board of directors.
Taylor has a big week: on Monday he was named executive chairman of
(ticker: TWTR) where founder and CEO Jack Dorsey is stepping down as officer and director.
Salesforce (CRM) stock fell 6.2% to $ 267.25 Wednesday in pre-market. This follows a 4% drop on Tuesday.
“In a market where everything but net ‘beats and raises’ are punished, we are not surprised to see CRM stocks come under some pressure,” writes Kirk Materne, analyst at Evercore ISI.
For the fiscal third quarter ended Oct. 31, Salesforce reported revenue of $ 6.86 billion, up 27% from a year ago or 26% adjusted for currency. and roughly in line with the estimate of $ 6.8 billion. On a non-GAAP basis, the company earned $ 1.27 per share, including a gain of 28 cents for mark-to-market strategic investments. Adjusted for the gain, the company edged out the consensus by 92 cents a share. Based on GAAP, the company earned 47 cents per share, including 27 cents from investment gains.
Performance bonds remaining at the end of the quarter stood at $ 36.3 billion, up 20% year-on-year.
“We had another phenomenal quarter, driving strong growth in revenue, margin and cash flow,” said Benioff. “With the tremendous power of our Customer 360 platform and Slack, we are on track to reach $ 50 billion in revenue in FY 26.”
For the January quarter, Salesforce forecasts revenue of $ 7.224 billion to $ 7.234 billion, up 24% from a year ago, with non-GAAP earnings of 72 to 73 cents per share. The Street projected $ 7.22 billion in profits and 81 cents a share. The company is forecasting a GAAP loss of 23 to 24 cents per share, larger than Street’s consensus at a loss of 15 cents. The company sees growth in the current remaining performance bonds of 19%.
For Fiscal 2022, Salesforce Now Reports $ 26.39-26.4 Billion, Up 24%, With Non-GAAP Profit of $ 4.68-4.69 Per Share ; the consensus was $ 26.33 billion and $ 4.42 per share.
For the April quarter, Salesforce is forecasting revenue of $ 7.215 billion to $ 7.25 billion, up 21% to 22%, which is lower than Street’s consensus of $ 7.35 billion.
For fiscal 2023, Salesforce forecasts revenue of $ 31.7 billion to $ 31.8 billion, up 20%, and in line with the Street at $ 31.8 billion.
Salesforce also announced the addition of two new board members:
CEO Laura Alber and former
CEO Oscar Munoz.
Write to Eric J. Savitz at [email protected]