BOSTON, Feb 25 (Reuters) - Business software maker Salesforce.com Inc posted quarterly earnings that nearly doubled and gave a full-year profit outlook that topped Wall Street projections, sending its shares up 10 percent in extended trade.
The results and outlook defied expectations among some investors, who thought Salesforce would post weaker-than-expected results due to the slowdown in global technology spending.
The company's Web-based programs are sold in subscriptions that extend over the course of one or more years. It books the revenue quarter-by-quarter over the life of those contracts, and Wall Street pays close attention to the as-yet-unused part, called deferred revenue, as an indication of future business.
'The whisper was that it was a terrible quarter for deferred. There had been some strong negativity surrounding the stock,' Wedbush Morgan analyst Michael Nemeroff said. Salesforce, however, reported that deferred revenue rose 24 percent to $594 million for the quarter ended Jan 31.
Fiscal fourth-quarter net profit rose to $13.8 million, or 11 cents a share, from $7.4 million, or 6 cents a share, a year earlier, the San Francisco company said. Analysts had expected profit per share of 7 cents, according to Reuters Estimates.
Earnings, excluding stock-based compensation and amortization of intangibles, were 23 cents per share, beating the average Wall Street target of 19 cents.
Revenue at the software maker -- which competes with SAP AG , Microsoft Corp, Oracle Corp and NetSuite Inc -- jumped 34 percent to $290 million, versus the average analyst estimate of $285 million.
Nemeroff said that investors were pleased with the company's revenue outlook because Salesforce is conservative in its sales forecasts and generally reports figures above the high end of its estimates.
Salesforce forecast first-quarter profit of 10 cents to 11 cents per share, versus the average Wall Street forecast of 10 cents. It also projected quarterly revenue of $304 million to $305 million, compared to the analyst forecast of $306 million.
It projected full-year profit of 54 cents to 55 cents, beating the analyst forecast of 50 cents. It forecast annual revenue of $1.30 billion to $1.33 billion, versus the average analyst forecast of $1.33 billion.
Salesforce shares rose 10 percent to $31.00 in extended trading from their New York Stock Exchange close at $28.10.
The stock hit a 52-week low of $20.85 in November amid concerns that fourth-quarter sales would be weak, causing growth in deferred revenue to slow.
(Reporting by Jim Finkle; Editing by Bernard Orr)
((jim.finkle@thomsonreuters.com; + 1 617 856 4344; Reuters Messaging: jim.finkle.reuters.com@reuters.net)n Keywords: SALESFORCE/
COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The results and outlook defied expectations among some investors, who thought Salesforce would post weaker-than-expected results due to the slowdown in global technology spending.
The company's Web-based programs are sold in subscriptions that extend over the course of one or more years. It books the revenue quarter-by-quarter over the life of those contracts, and Wall Street pays close attention to the as-yet-unused part, called deferred revenue, as an indication of future business.
'The whisper was that it was a terrible quarter for deferred. There had been some strong negativity surrounding the stock,' Wedbush Morgan analyst Michael Nemeroff said. Salesforce, however, reported that deferred revenue rose 24 percent to $594 million for the quarter ended Jan 31.
Fiscal fourth-quarter net profit rose to $13.8 million, or 11 cents a share, from $7.4 million, or 6 cents a share, a year earlier, the San Francisco company said. Analysts had expected profit per share of 7 cents, according to Reuters Estimates.
Earnings, excluding stock-based compensation and amortization of intangibles, were 23 cents per share, beating the average Wall Street target of 19 cents.
Revenue at the software maker -- which competes with SAP AG , Microsoft Corp, Oracle Corp and NetSuite Inc -- jumped 34 percent to $290 million, versus the average analyst estimate of $285 million.
Nemeroff said that investors were pleased with the company's revenue outlook because Salesforce is conservative in its sales forecasts and generally reports figures above the high end of its estimates.
Salesforce forecast first-quarter profit of 10 cents to 11 cents per share, versus the average Wall Street forecast of 10 cents. It also projected quarterly revenue of $304 million to $305 million, compared to the analyst forecast of $306 million.
It projected full-year profit of 54 cents to 55 cents, beating the analyst forecast of 50 cents. It forecast annual revenue of $1.30 billion to $1.33 billion, versus the average analyst forecast of $1.33 billion.
Salesforce shares rose 10 percent to $31.00 in extended trading from their New York Stock Exchange close at $28.10.
The stock hit a 52-week low of $20.85 in November amid concerns that fourth-quarter sales would be weak, causing growth in deferred revenue to slow.
(Reporting by Jim Finkle; Editing by Bernard Orr)
((jim.finkle@thomsonreuters.com; + 1 617 856 4344; Reuters Messaging: jim.finkle.reuters.com@reuters.net)n Keywords: SALESFORCE/
COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.