Salesforce.com’s share price jumps after reporting a strong earnings outlook and company narrows loss
Salesforce.com has reported a stronger-than-expected earnings outlook, prompting its share price to jump more than seven per cent in after hours trading.
The world's largest maker of online sales software said it expects to earn between 99 cents per share to $1.01 per share in the current fiscal year on revenue of $8.08bn (£5.8bn) to $8.12bn, above expectations of 98 cents per share.
Salesforce's shares have dropped over 20 per cent so far this year, but the upbeat outlook appears to have appeased investors.
"By any measure, this was a spectacular finish to the year with 27 per cent revenue growth in constant currency for the fourth quarter, and for the full year," said Marc Benioff, chairman and chief executive of Salesforce. "We are raising our fiscal year 2017 revenue guidance to $8.12bn at the high end of our range – unprecedented growth for a company of our size and scale."
It reported a loss of $25.5m in the quarter to the end of January, compared to a loss of $65.8m in the same period a year ago.
Meanwhile, revenue rose 25 per cent year-on-year to $1.81bn for the fourth quarter, ahead of estimates of $1.79bn, according to Reuters data.
Adjusted profit per share also matched estimates, coming in at 19 cents for the quarter.
The company's results were seen as an indicator of whether the industry was in trouble after Tableau Software's poor sales outlook earlier this month.
The San Francisco-based company has benefited as more businesses choose cheaper and easier software services that are delivered online, meaning no software has to be directly installed onto computers.