Salesforce shares dip 4% on light revenue, earnings guidance

Salesforce shares dip 4% on light revenue, earnings guidance

Salesforce.com Inc. shares were down 4% in after-hours trading Thursday after the enterprise-content platform reported fiscal first-quarter results that were largely in line with Wall Street estimates but offered guidance that fell short.

Salesforce CRM, +2.54% reported net income of $99 million, or 11 cents a share, compared with net income of $392 million, or 49 cents a share, in the year-ago quarter. Adjusted earnings were 70 cents a share, down from 93 cents a share a year ago.

Revenue improved 30% to $4.87 billion from $3.74 billion a year ago.

Analysts surveyed by FactSet had expected adjusted earnings of 69 cents a share on sales of $4.85 billion.

What tripped up Salesforce shares in after-hours trading was light guidance as the company — like so many of its corporate peers — attempt to navigate choppy waters caused by the ongoing COVID-19 pandemic.

The company offered current second-quarter revenue guidance of $4.89 billion to $4.93 billion, while FactSet analysts are expecting $5.035 billion. Its guidance of adjusted EPS of 66 cents to 67 cents a share fell shy of FactSet projections of 74 cents a share.

“Our results, amidst this global crisis, demonstrated our ability to execute at speed, innovate at scale and the strength of our business model,” Salesforce Chief Executive Marc Benioff said in a statement announcing the results. Benioff, who co-founded the San Francisco-based cloud-computing giant, regained the title of sole CEO in February after sharing the title briefly with former executive Keith Block.

Later, during a conference call with analysts, Benioff said Salesforce has heard from more companies than ever, including customer AT&T Inc. T, -2.48% that are accelerating their operations to a “digital-first world.”

On Wednesday, Salesforce announced a partnership with Workday Inc. WDAY, +7.14% .

Salesforce shares are up 11.5% this year. The broader S&P 500 index SPX, -0.21% is down 6% in 2020.

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