Salesforce hikes by 1% following positive figures for revenue and earnings per share in Q3

Salesforce hikes by 1% following positive figures for revenue and earnings per share in Q3
Written by:
Michael Harris
6th December 2019
Updated: 11th March 2020
  • Salesforce beat analysts' estimate for revenue and earnings per share in the third quarter.
  • The software company upgraded its guidance, expecting $17 billion in revenue for the full fiscal year.
  • CFO Mark Hawkins expects the company to double in size by 2024.
  • Salesforce has announced acquisitions with Tableau, Mulesoft, and ClickSoftware in the recent years.
  • The stock has gained 18% in the stock market in 2019 so far.

American cloud-based software company, Salesforce, announced its earnings report for the third quarter of 2019. Following the better than expected results, the stock was reported to have gained by 1% in after-hours trading on Tuesday.

Salesforce Beats Analysts’ Estimate For Revenue And Earnings Per Share

Based on Refinitiv’s survey, analysts were expecting the software company to print $4.45 billion in revenue in the fiscal third quarter. Beating the estimate, however, Salesforce reported $4.5 billion in revenue in its earnings report. In terms of earnings per share (EPS), experts had forecasted it to be capped at 66 cents per share. At 75 cents per share, Salesforce recorded better than expected figure for quarterly EPS as well.

The overall performance for Salesforce in the stock market in 2019 has been upbeat so far. Having started the year at $135.55, share prices were reported at around $167 in March. The year-to-date low for the stock remains at $130.40. As of Thursday, Salesforce has lost the gains it noted after the Q3 earnings report and was seen trading as low as $158 in the extended trading on Thursday.

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All in all, Salesforce has printed an 18% growth in its stock in 2019 that remains significantly shy of the benchmark S&P 500 that has hiked 23% this year. The software company’s returns, as per the analysts, have also remained short of the other, much smaller cloud competitors like Shopify, ServiceNow, and Veeva.

According to the data extracted from Refinitiv’s survey, analysts are anticipating $16.9 billion in revenue for the software company in the full fiscal year report. Salesforce itself, however, has upgraded its guidance following the better than expected performance results in the third quarter. The company is now expecting $17 billion in revenue for the full fiscal year.

CFO Mark Hawkins Expects The Company To Double In Size By 2024

In the Dreamforce Conference held in November, Mark Hawkins, the chief financial officer at Salesforce had expressed his confidence that the company can be expected to double in size by 2024. His estimate for revenue in fiscal 2024 was $34 billion to $35 billion.

The Sales Cloud business that offers relationship management tools saw considerable growth in 2019’s Q3. Marking a 15% growth, the revenue in this sector for Salesforce was reported at $1.17 billion. The report further highlights that the company has now started to focus on acquisitions in an attempt to expand its business and enter new markets.

A few of the acquisitions for Salesforce so far include a $15.3 billion deal with Tableau (data analytics company), $6.5 billion purchase of Mulesoft, and $1.35 billion acquisition with ClickSoftware.

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