Salesforce.com Matches Estimates on Big Business Deals

Tuesday, 20 Nov 2012 07:17 PM

 

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Salesforce.com Inc. forecast fiscal fourth-quarter sales and profit that were in line with analysts’ estimates as the company signed larger deals with businesses after its annual customer conference.

Sales for the quarter ending in January will be $825 million to $830 million, Salesforce said Tuesday in a statement. That compares with the $829.9 million average estimate of analysts, according to data compiled by Bloomberg. Profit excluding some items will be 38 to 40 cents a share, compared with analysts’ average 40-cent estimate.

Chief Executive Officer Marc Benioff is signing bigger enterprise agreements that give customers broad access to Salesforce’s software, following the company’s Dreamforce conference in September. That’s helping to stave off competition from Oracle Corp., SAP AG and Microsoft Corp., which are buying companies that offer business-management tools over the Internet and gaining traction in an area Salesforce pioneered.

“Cloud-related companies are seeing growth hold up a lot better than other technology businesses,” Derrick Wood, an analyst at Susquehanna Financial Group, said in an interview. “Traditional tech companies are seeing a lot of deceleration in growth.” Wood rates the shares positive.

Billings -- the amount Salesforce charged customers during the third quarter -- rose 31 percent to $742.9 million from a year earlier. That compares with the $733.8 million average estimate of analysts.

Broad Offerings

Shares of San Francisco-based Salesforce rose 1.4 percent in late trading. The stock declined 1 percent to $145.90 at the close in New York. Salesforce is up 44 this year, compared with a 9.9 percent gain for the Standard & Poor’s 500 Information Technology index.

Salesforce, the largest maker of online customer management software, is using its own acquisitions -- including Rypple and Buddy Media Inc. -- to expand beyond its core product into new areas such as human resources and social media marketing. Customers rent Salesforce’s products for annual fees and access them through a Web browser instead of installing programs on their own computers.

Revenue for the 2014 fiscal year that starts in February will increase to $3.8 billion to $3.85 billion, the company said. Analysts on average predicted sales of $3.83 billion.

For the fiscal third quarter ended in October, sales rose 35 percent to $788.4 million, compared with analysts’ average $776.6 million estimate. Earnings excluding some items were 33 cents a share, compared with analysts’ 32-cent estimate.

A $220.3 million net loss in the third quarter compared with a loss of $3.76 million a year earlier. Salesforce said it incurred a $149 million tax-related charge, while spending on marketing and sales rose 41 percent from a year earlier.

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