Earnings Preview: Salesforce.com

Salesforce.com (CRM) is expected to report Q2 earnings Wednesday Aug. 20 after market close, with a conference call scheduled for 5:00 pm ET.

Guidance

The consensus estimate is 8c for EPS and $260.56M for revenue, according to First Call. Guidance provided on the last earnings call was for EPS of 7c to 8c on revenue of $258M to $259M. Guidance for FY09 was for EPS of 33c to 34c on revenue of $1.065B.

Analyst Views

Deutsche Bank expects solid Q2 results from CRM that should at least meet its estimates of $260M in sales and 9c in EPS. The firm's checks over the last few weeks show healthy deal activity and business momentum. RBC Dain is expecting strong Q2 results. Its checks indicated a strong continuation of the viral adoption of Salesforce.com with particular strength in international geographies. The firm expects slight upside as Street estimates are already above management's guidance range. RBC said full-year guidance needs to increase to keep pace with Street expectations. The current FY09 consensus estimate is 35c on revenue of $1.075B. RBC said that underlying fundamentals will also be important. That given the high top and bottom-line expectations, the company will need to outperform on underlying metrics such as deferred revenue, CFO and customer count.

Soleil does not expect Q2 results to hold any major surprises for investors. The firm is modeling 8c on $266M in revenue. Soleil expects the acquisition of Instranet for $32M announced today to bolster the back-office product suite, where the company is a distant competitor to Oracle (ORCL), but can pick up ground on emerging competitors such as RightNow (RNOW).

Key issues for the conference call: Forward guidance, commentary on market share and pricing, and more details on the Instranet acquisition.