Salesforce.com Beats Estimates After Adding Customers
Salesforce.com Inc. CEO Marc Benioff
Kim White/Bloomberg
Marc Benioff, chairman, chief executive officer of Salesforce.com Inc.
Marc Benioff, chairman, chief executive officer of Salesforce.com Inc. Photographer: Kim White/Bloomberg
Salesforce.com Inc., the world’s largest seller of online customer-management software, rose to a record in New York trading after forecasting sales and profit that beat analysts’ estimates.
Revenue in the third quarter will be $408 million to $410 million and earnings excluding some costs will be 30 cents to 31 cents a share, the San Francisco-based company said yesterday. Analysts on average projected $393.9 million in sales and 28 cents in profit.
Chief Executive Officer Marc Benioff, 45, aims to attract customers with new online applications and services, including a social-networking feature similar to Facebook, called Chatter. About 20,000 companies -- a fourth of Salesforce.com’s customers -- have started using Chatter since its June release, Benioff said yesterday. The company said it will add employees and build three new data centers to drive sales.
“Salesforce.com is showing loud and clear that the industry is moving to software as a service, where companies prefer to subscribe to software rather than install and manage it,” Sasa Zorovic, an analyst at Janney Montgomery Scott LLC, said in an interview from Boston. He advises investors to buy the shares, which he said he doesn’t own.
Salesforce.com climbed $16.34, or 17 percent, to $112.75 at 4 p.m. in New York Stock Exchange composite trading, the biggest jump since November 2008. The shares have gained 53 percent this year.
Second Quarter
Second-quarter net income dropped 30 percent to $14.7 million, or 11 cents a share, from $21.2 million, or 17 cents, a year earlier, the company said yesterday in a statement. Interest expenses lowered the results in the latest quarter. Excluding certain costs, profit was 29 cents a share, topping the 27-cent average of analysts’ estimates compiled by Bloomberg.
The company added 340 employees in the second quarter and expects to accelerate hiring through December, Benioff said yesterday. “If we were bigger, we would be selling more,” he told analysts. Salesforce.com had almost 4,450 employees at the end of the quarter.
Sales for the period ended July 31 rose 25 percent to $394.4 million. Analysts had predicted revenue of $384.8 million on average.
To contact the reporter on this story: Rochelle Garner in San Francisco at rgarner4@bloomberg.net
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