Earnings Preview: Salesforce.com

Salesforce.com (CRM) is expected to report Q3 earnings after market close Thursday, November 20, with a conference call scheduled for 5:00 pm ET.

Guidance

The consensus estimate is 7c for EPS and $273.56M for revenue, according to First Call. Guidance from management on the last earnings call was for Q3 EPS of 8c to 9c and revenue of $273M to $274M. The company has also raised its FY09 guidance to 34c to 35c on revenue of $1.07B to $1.075B. On Sept. 4, at the Citigroup global Tech conference, the CFO said he had a "high degree" of confidence in prior FY revenue view. He also said he was comfortable with current deals, and saw no skewing up or down. The company was hiring aggressively, to meet internal goals. Lastly, the CFO said bookings are to be slightly more skewed towards Q4 and that Salesforce will see a big spike in deferred revenue in Q4.

Analyst Views

American Technology believes Salesforce.com's business fundamentals remain relatively solid but the firm is "hesitant" to initiate new positions ahead of the Q3 call. Lazard Capital says Salesforce is likely to report a slight beat for Q3 and believes the bad news is priced into shares. The firm thinks the stock could have a relief rally following the earnings report. Roth Capital estimates Q4 revenue of $288M, nearly $2M below the $289.69M consensus estimate, GAAP EPS of 6c, a penny below consensus. For 2010, Roth estimates revenue of $1.340B, $20M below consensus, and GAAP EPS of 47c, 10c below consensus.

Comments

[WhynoT:]

I really don't understand how CRM can maintain these ridiculous circa 2000 valuations...

Netsuite saw a precipitous dropoff in business in october and has stepped up directly targeting CRM customers.

I'm short going into earnings... I was on the wrong side of GME, lets see if I can go 2 for 2 today.

2008 Nov 20 03:03 PM