Salesforce Posts Weak Outlook for the Fourth Quarter

Salesforce guidance for the fourth quarter fails to meet Wall Street analysts' expectations

Salesforce Inc. posted its fiscal third-quarter results that beat Wall Street analysts’ expectations for both profits and sales, but the company’s shares fell 6% in extended trading after announcing fourth-quarter guidance that missed expectations.

The company’s adjusted earnings during the quarter ending on October 31 amounted to $1.27 per share, recording a growth of 27% year on year, while analysts’ expectations did not exceed 92 cents per share. As for revenues, salesforce raised $6.86 billion, beating expectations of $6.8 billion, with sales growing 27% over last year’s levels, when the company raised $5.42 billion.

Salesforce raised its revenue forecast for the fourth fiscal quarter to a range of $7.22-7.23 billion, in line with analysts’ estimates of $7.22 billion, but Salesforce sees earnings per share for the January quarter in the range of 72-73 cents, to fail reaching analysts’ expectations of 81 cents per share.

Sales of the Sales Cloud division, which is the core of the company’s business, reached $1.54 billion, a growth of 17% from last year, and as for the cloud services business, it witnessed a 20% growth in sales from last year to reach $1.66 billion.

The company’s platform and other businesses generated nearly $1.27 billion in sales during the quarter, and Salesforce closed its acquisition of corporate chat app Slack in July, contributing about $276 million to the platform division’s sales. Read More [Slack Becomes Microsoft Rival After Salesforce Acquisition].

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