Salesforce Shares Jump as It Raises Earnings Forecast

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Marc Benioff, co-CEO of Salesforce.com Inc., speaks at a panel session at the World Economic Forum in Davos, Switzerland, on Tuesday, May 24, 2022.

Hollie Adams | Bloomberg | Getty Images

Salesforce shares rose 5% in expanded trading Tuesday after the enterprise software maker reported first-quarter fiscal results that beat analysts’ expectations and lifted its full-year earnings estimates.

This is how the company did it:

  • Income: 98 cents per share, adjusted, versus 94 cents per share as expected by analysts, according to Refinitiv.
  • Revenue: $7.41 billion, versus $7.38 billion as expected by analysts, according to Refinitiv.

Salesforce sales increased 24% year over year in the quarter ended April 30, according to a statement. Net income fell 94% to $28 million.

Salesforce said revenue from its Service Cloud for handling customer service inquiries generated $1.76 billion in revenue, an increase of nearly 17%. Revenue from its core product Sales Cloud for managing business opportunities contributed $1.63 billion, an increase of approximately 18%.

In the quarter, Salesforce said its Sales Cloud, Service Cloud, and Marketing Cloud integrations for Slack were launching in beta. Salesforce acquired Slack in July for $27.1 billion. The company also announced the launch of Safety Cloud for hosting in-person events during the quarter, and changed its official name to Salesforce Inc. from Salesforce.com Inc. Salesforce was founded in 1999, in the midst of the dotcom craze.

In early March, after Russia invaded Ukraine, Salesforce said it was beginning to end the relationships with customers it had built through resellers and other channels in Russia.

Regarding the guidance, Salesforce said it sees fiscal second quarter earnings of $1.01 to $1.02 per share on an adjusted basis and revenue of $7.69 billion to $7.70 billion. Analysts polled by Refinitiv had expected adjusted earnings per share of $1.14 on revenue of $7.77 billion.

Salesforce lowered its revenue forecast for the full fiscal year 2023 while boosting its earnings outlook. It now sees $4.74 to $4.76 per share in adjusted earnings and $31.7 billion to $31.8 billion in revenue. Analysts polled by Refinitiv had expected adjusted earnings per share of $4.65 and revenue of $32.06 billion.

Despite the out-of-hours move, Salesforce shares are down about 36% since the beginning of the year, while the broader S&P 500 index is down 13% over the same period.

Executives will discuss the results with analysts in a conference call beginning at 5 p.m. ET.

This is the latest news. Come back here for updates.

WATCH: Salesforce was born in the 2001 recession, says chairman and co-CEO Marc Benioff



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