Salesforce.com (CRM) late Wednesday reported July quarter per-share earnings and revenue that topped analyst estimates, including a small contribution from recently acquired Slack Technologies. CRM stock rose as Salesforce earnings guidance came in above Wall Street targets.
Salesforce reported earnings of $1.48 per share, including a 43-cent investment gain, on an adjusted basis. In addition, revenue climbed 23% to $6.34 billion, including the acquisitions of Slack and Accumen. The Slack deal closed July 21.
A year earlier, Salesforce earnings were $1.44, including investment gains on revenue of $5.15 billion. Excluding investment gains, Salesforce earned $1.05 in the July quarter versus 68 cents a share a year earlier.
Analysts expected Salesforce to report earnings of 92 cents a share on sales of $6.24 billion.
The enterprise software maker said current remaining performance obligations, or CRPO bookings, rose 23% to $18.7 billion. That topped analyst estimates of $18.23 billion. CRPO bookings are an aggregate of deferred revenue and order backlog.
CRM Stock: Guidance Tops Expectations
CRM stock rose 1.3% to 264.27 in extended trading on the stock market today. Heading into the earnings report, Salesforce stock traded about 4% below an entry point of 271.02.
For the current quarter ending in October, Salesforce’s revenue outlook came in above expectations. The software maker expects revenue in a range of $$6.78 billion to $6.79 billion vs. estimates of $6.65 billion.
The company forecast earnings in a range of 91 cents to 92 cents a share. Analysts had projected a profit of 82 cents a share.
Operating Margins An Issue Amid Acquisitions
Heading into the earnings report, Salesforce stock owned a Relative Strength Rating of 64 out of a possible 99.
Salesforce sells software under a subscription model. Its software helps businesses organize and handle sales operations and customer relationships.
The company has expanded into marketing, customer services and e-commerce. One issue for CRM stock is that Salesforce’s operating margins lag large-cap, software peers.
IBD offers a broad range of growth stock lists, such as Leaderboard. Investors also can create watch lists for issues like CRM stock, find companies nearing a buy point, or develop custom screens at IBD MarketSmith.
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