Salesforce Reports In-Line Quarter, Stock Slips

Salesforce.com (CRM) late yesterday reported results for the fiscal third quarter ended October 31 which were about in line with Street expectations - but apparently slightly disappointing to some.

Salesforce reported revenue for the quarter of $130 million, and pro forma EPS of 6 cents a share; the consensus view was for $129 million and 5 cents. The company sees fiscal fourth quarter revenue of $140 million to $142 million and pro forma profits of 20-23 cents a share; the Street had expected $142 million and 7 cents. For all of fiscal 2008, the company sees revenue of $700 million to $710 million; the Street has been looking for $699 million.

CEO Marc Benioff seemed to like the quarter; in the release, he described it as “spectacular.”

But the stock nonetheless sold off after hours, backing off 91 cents to $41.48, after losing $1.11 in the regular session. Nonetheless, the shares have roughly doubled in price since mid July.

See: Salesforce.com F3Q07 (Qtr End 10/31/06) Earnings Call Transcript

Comments

[Perry1961:]

CRM has two big problems. First,MSFT has announced intentions to dominate the sector. CRM has Walmart like margins,and can't afford to cut prices to compete. Second,options wipe out profits this year and next. The widely reported P/E of 275 will climb to 1400 next year as the company only reports GAAP earnings now,and GAAP earnings will only be 3 cents in '08. That's not so spectacular imo.

2006 Nov 16 06:49 AM