Salesforce shares slump 6% as outlook disappoints
$Salesforce(CRM.US$ shares slumped as much as 6% in after-hours trading, Tuesday, as the cloud-based business software company gave a fourth-quarter outlook that proved an immediate disappointment on Wall Street.
Salesforce said that for its fourth quarter, it expects to earn between 72 cents and 73 cents a share, excluding one-time items, on revenue in a range of $7.22 billion to $7.23 billion. Those forecasts fell short of analysts' estimates for earnings of 82 cents a share on $7.24 billion.
The outlook came along with Salesforce touting its third-quarter results and announcing some changes in it executive ranks and board room.
Salesforce reported a third-quarter profit of $1.27 a share, excluding one-time items, on $6.86 billion, compared to earnings of $1.72 a share, on $5.42 billion in sales in the same period a year ago. Analysts had forecast Salesforce to earn 92 cents a share on $6.8 billion in revenue.
It was Salesforce's first full quarterly report since completing its $27.7 billion acquisition of Slack Technologies. While Salesforce didn't break out contributions from Slack, Chief Financial Officer Amy Weaver said "we are pleased with Slack’s representation in our largest deals."
The company's results were highlighted by its subscription revenue, which rose 25% from a year ago, to $6.38 billion. Professional services and other revenues total $480 million, an increase of 45% from last year's third quarter.
Separately, Salesforce said company president Bret Taylor will become its co-Chief Executive and serve alongside current CEO Marc Benioff. Taylor was also named to Salesforce's board of directors along with $Williams-Sonoma(WSM.US$ CEO Laura Alber, and former United Airlines (NASDAQ:UAL) $United Airlines(UAL.US$ CEO Oscar Munoz.
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Robbie Showen : I am not selling....seems like a huge over reaction.
IMO
TCFIT_365 : …and when they beat again this “guidance disappointment” will be irrelevant….again
Dogoro777 TCFIT_365: for 17 years and counting....
Cake_WU : So forecast revenue is 0.01 billion less than estimate and shares are down heavily? Probably the co-CEO is the right fear factor.
If you have an extraordinary CEO who indicates to step down a lot of algos freak out :)
Staying long in my children's porfolio
wallstreet wolf Cake_WU: Benioff did the same with Keith Block as Co-CEO. No big deal.