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Salesforce on Tuesday issued disappointing current quarter earnings guidance but posted better-than-expected quarterly results as demand for the company’s cloud-based services strengthened.
San Francisco-based Salesforce said it now expects to post fiscal 2018 revenue of between $10.43bn to $10.44bn, up from its previous outlook for $10.35bn to $10.4bn. It also boosted its full-year adjusted earnings outlook to between $1.32 to $1.33 cents a share, up from $1.29 to $1.31 cents a share.
However, for the current quarter, the company expects adjusted earnings of between 32 to 33 cents a share, shy of Wall Street estimates of 34 cents.
The mixed outlook saw shares fluctuate between losses and gains in extended trade and accompanied third quarter results that topped analysts’ estimates. Shares initially rose as much as 3 per cent before reversing those gains to trade 1.7 per cent lower at $107.
“Salesforce delivered a record third quarter, and we’re on a path to exceed $20 billion faster than any enterprise software company in history,” said chief executive Marc Benioff. In the three months ended in October, the company reported a profit of $51.4m or 7 cents a share, compared with a loss of $37.3m or 5 cents a share in the year ago quarter. Adjusting for one-time items, earnings of 39 cents a share were 2 cents ahead of analysts’ estimates.
Revenues of the company’s flagship Sales Cloud rose 17 per cent year-on-year to $906.5m. That helped overall revenues rise 23 per cent on a constant currency basis to $2.68bn, marginally ahead of expectations.
Earlier this month, Salesforce forged an alliance with Google, alongside its existing relationship with Amazon Web Services, amid a realignment in the IT world driven by the rise of cloud computing. Lower costs have whipped up demand for cloud-based services and helped send Salesforce shares up nearly 60 per cent so far this year.