courtesy of Salesforce
For five years, Salesforce (CRM) has relied on the combination of co-founder and CEO Marc Benioff, and Chief Operating Officer Keith Block, who was recently promoted to co-CEO.
They’ve built the business into a $10 billion enterprise, and it appears they’re well on their way to $13 billion in fiscal 2019 revenue — as Benioff had predicted — based off the company’s second-quarter earnings released after markets closed on Wednesday.
As freshly minted co-CEOs, they’ve delivered another winning quarter.
The San Francisco-based company reported adjusted earnings of 71 cents per share on revenue of $3.28 billion, up 27% from the same quarter a year ago. Each beat consensus estimates of analysts polled by FactSet, who expected adjusted earnings of 47 cents per share on revenue of $3.23 billion. A year ago, Salesforce posted adjusted earnings of 33 cents per share.
Salesforce did, however, offer guidance for third-quarter adjusted earnings that, at 49 cents to 50 cents, came in below analyst estimates of 53 cents. That sent the company’s stock down 1% to $152.91.
“It looks to us like Salesforce has stacked the odds toward a meaningful beat” when it reports its fiscal 2019 in February 2019, Canaccord Genuity enterprise software analyst Richard Davis said in a note Thursday, in which he raised his price target to $165 from $150. He deemed Salesforce’s Q3 guidance as “conservative.”
Salesforce’s recent $6.5 billion acquisition of MuleSoft has figured heavily in results. Joel Fishbein, BTIG Managing Director, software and cloud technology, tells Barron’s that MuleSoft, an integration-software maker, has generated fresh revenue, though it diluted Salesforce’s earnings. Earlier this week, he raised his price target on the company’s shares to $175 from $140.
Salesforce raised its fiscal 2019 revenue guidance to $13.125 billion to $13.175 billion.
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