Making Good Results Better

| About:, Inc. (CRM) (NYSE:CRM) on Tuesday produced excellent results but disappointed some of its shareholders, who had expected better. The stock was at or near its 52-week high and reports of 20% increase in revenues in a terrible economy were not satisfactory to this very tough crowd. Who managed those expectations? Marc Benioff?

Hmnm... How to please? Well, let’s look at some balance sheet issues. currently holds approximately $1 billion in cash and marketable securities. About 60% of this balance seems to be something called a non-current or long-term asset, which raises enough questions on its own. This is a 600% increase in the last nine months. The cash items now constitute 13% of the company's market capitalization, as R&D is comfortably paid for from regular cash flows.

So how do we please shareholders (because good results apparently do not cut it here)? I know, lets spend some cash and make some acquisitions; come up with joint ventures and other cool financial engineering stuff. By then, of course, the nature of the company will change and you will have to start wondering if the management group is the correct team, if the earnings be accretive and all that kind of stuff.

Ever get the feeling that management is about to take their eye off the ball and make it sound like a complicated business school strategy case?