Earnings Preview: Salesforce.com

May.19.11 | About: Salesforce.com, Inc. (CRM)

Salesforce.com (NYSE:CRM) is expected to report Q1 earnings after the market close on Thursday, May 19, with a conference call scheduled for 5:00 pm ET.

Guidance

The consensus estimate is 27c for EPS and $482.45M for revenue, according to First Call. Guidance on the last earnings call was for Q1 EPS of 26c-27c on revenue of $480M-$482M. The main focus of the earnings will be how the company’s flagship Customer Relationship Management, or CRM, product is doing, and perhaps more importantly how its newer cloud-computing products -- Force.com, AppExchange, Database.com and Chatter -- are doing. Investor expectations are high for these products.

Analyst Views

Stifel feels sustained momentum and currency tailwinds should help offset expected seasonal slowdown in Q1. They are expecting modest upside to their revenue estimate of $482M. Stifel doesn't expect much of that top-line upside to trickle through to earnings leverage, but it remains comfortable with its non-GAAP EPS estimate of 27c. While the sales engine appears in the U.S. appears to be in full swing, Stifel says investors should be prepared for a seasonal slowdown that is exacerbated by tougher comps and the slowdown in Japan. Stifel's model calls for $420M in bookings, representing year-over-year growth of 25%. Concerns regarding Japan exposure overblown, in Stifel’s view: The company as about 14% of revenue coming from the Asia-Pacific region, about 10% from Japan. Some street estimate are calling for an impact as high as a $40M-$50M headwind on the quarter. Company guidance for FY1 is $1.35-$1.38 on $2.03B-$2.05B in revenue. FY12 consensus is $1.27/$2.11B.