Salesforce tops analysts’ estimates for earnings and revenue in the third quarter

Written by: Wajeeh Khan
December 2, 2020
  • Salesforce reports £4.04 billion of revenue and £1.30 per share of adjusted earnings in Q3.
  • The cloud-based software firm says it will buy Slack Technologies for £20.64 billion.
  • Salesforce forecasts up to £4.23 billion of revenue in the fiscal fourth quarter.

Salesforce.com Inc. (NYSE: CRM) reported its financial results for the fiscal third quarter on Tuesday that topped analysts’ estimates for earnings and revenue. The company also said that it will buy Slack Technologies Inc. for £20.64 billion.

Salesforce shares slipped close to 4% in extended trading on Tuesday. Including the price action, the San Francisco-based company is now exchanging hands at £172.64 per share after recovering from a year to date low of £92.60 per share in March, when the impact of the Coronavirus pandemic was at its peak.

Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.

The stock had started the year at a per-share price of £124.42. If you want to invest in the stock market, you’ll need a broker – here’s a list of the top few to make selection easier for you.

Salesforce’s Q3 financial results versus analysts’ estimates

Salesforce said that its net income in the third quarter printed at £800 million that translates to 86 pence per share. In the same quarter last year, it had recorded a significantly lower £81.20 million of net income or 8.94 pence per share.

On an adjusted basis, the cloud-based software company earned £1.30 per share in Q3 versus the year-ago figure of 55.88 pence per share. In terms of revenue, Salesforce registered an increase to £4.04 billion in the recent quarter from £3.36 billion last year.

According to FactSet, analysts had anticipated the company to post £3.90 billion of revenue in the third quarter. Their estimate for per-share earnings was capped at a much lower 55.88 pence. In the prior quarter (Q2), Salesforce had generated £3.91 billion of revenue, as per the report published in August.

Salesforce’s guidance for the fiscal fourth quarter

Chairman Marc Benioff of Salesforce commented on the earnings report on Tuesday and said:

“We had another record quarter, and now we’re raising our FY21 revenue guidance to £15.73 billion at the high end and initiating FY22 guidance of £19 billion.”

For the fiscal fourth quarter, Salesforce now expects up to 55.13 pence per share of adjusted earnings on up to £4.23 billion of revenue. Experts, on the other hand, are calling for a higher 64.07 pence per share of adjusted earnings and £4.10 billion of revenue.

Salesforce performed fairly upbeat in the stock market last year with an annual gain of more than 20%. At the time of writing, it is valued at £163.62 billion and has a price to earnings ratio of 94.55.