Salesforce.com (NYSE: CRM), one of the world's leading customer relationship management platform, will issue its fiscal 2014 fourth quarter results on Thursday, Feb. 27, 2014, after the close of the market. The company will host a conference call at 2:00 p.m. (PST) / 5:00 p.m. (EST) to discuss its financial results with the investment community.
Wall Street expects San Francisco, California-based Salesforce to earn 6 cents a share, according to analysts polled by Thomson Reuters. The consensus estimate implies a decrease of 53.8 percent from 13 cents it earned last year. The company estimates a GAAP net loss of 24 to 25 cents a share while non-GAAP EPS is expected to be in the range of 5 to 6 cents.
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Salesforce earnings have managed to beat Street view twice in the past four quarters. The consensus estimate remained flat over the past 90 days, and one analyst has raised the profit view in the last 30 days.
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However, quarterly revenues are estimated to increase 35.4 percent to $1.13 billion from $834.68 million last year while the company sees revenue of $1.124 billion to $1.129 billion, an increase of 35 percent year-over-year.
Billings growth continues to be one of the best ways to gauge CRM's business. BMO Capital Markets analyst Joel Fishbein expects billings of $1.834 billion, up 30.5 percent from the prior year.
For a company like Salesforce, deferred revenue is another key metric to watch. Deferred revenue on the balance sheet as of Oct. 31, 2013 rose 34 percent to $1.73 billion, benefited in part by the acquisition of ExactTarget.
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Current deferred revenue increased 38 percent to $1.69 billion, and non-current deferred revenue fell 26 percent to $48 million. Unbilled deferred revenue, representing business that is contracted but unbilled and off balance sheet, ended the third quarter at approximately $4.20 billion, up 40 percent from last year.
Meanwhile, the market will look for any improvements in the expenses front as the company's past results have been negatively impacted by higher costs. For the third quarter, costs of goods sold rose 25 percent and operating expenses climbed 38 percent.
Investors will look for further updates from Salesforce over its recent deal with HP. Further, they may want additional color on the marketing cloud business. Salesforce.com may need to continue to acquire companies in this area so as to remain current with the latest marketing trends. More updates on this front would be welcomed.
In November, the company unveiled Salesforce ExactTarget Marketing Cloud, the customer platform for 1:1 marketing. The ExactTarget Marketing Cloud combines ExactTarget's digital marketing apps and platform with salesforce.com's social marketing products – Buddy Media, Radian6 and Social.com. The Street would like to hear about the traction of this product.
Salesforce is betting on higher enterprise adoption of mobile apps that is expected at 20 percent and is projected to go to 90 percent by 2017. The recently introduced Salesforce 1 could help the company with its mobile ambitions. The new platform, which should be available in the first half of 2014, is built for developers, independent software vendors (ISVs), end users and admins.
In January, the company announced soaring adoption of Salesforce1, its new social, mobile and cloud customer platform. In its first month, there was a 96 percent increase in Salesforce1 mobile app active users and a 46 percent increase in active users of custom mobile apps. The Street will look for further updates on Salesforce1.
The market would also be focusing on the outlook for both the first quarter and full year. An upside/downside versus consensus view may decide the course of share movement. Revenue for the company's full fiscal year 2015 is projected to be in the range of $5.15 billion to $5.20 billion and the company will provide EPS expectations when it announces its fourth quarter results.
For the third quarter, Salesforce posted a net loss of $124.4 million or 21 cents a share, compared with a net loss of $220 million or 39 cents a share last year. Excluding items, adjusted earnings for the quarter were 9 cents a share. Quarterly revenue rose to $1.08 billion from $788 million last year.
CRM stock has gained 15 percent since its last quarterly results and climbed 56 percent in the last one year. Shares of the company have traded between $36.09 and $64.65 during the past 52-weeks.
Wall Street, in general, have a positive opinion on the stock, with 38 out of the 45 analysts covering CRM giving a "buy" or "strong buy" rating. Three analysts rate the stock as "hold," while 4 have a "sell" rating on the stock.
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