Salesforce.com Earnings: Double-Digit Revenue Growth, Stock Pops

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S&P 500 (NYSE:SPY) component salesforce.com inc. (NYSE:CRM) reported a drop to a loss in the first quarter driven by higher costs. Salesforce.com is a cloud computing company, which provides customer relationship management products to businesses. It offers a technology platform for Internet-based computing, storage, and connectivity solutions for customers and developers.

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salesforce.com inc Earnings Cheat Sheet for the First Quarter

Results: Reported a loss of $19.5 million (14 cents per diluted share) in the quarter. The computer software had net income of $530,000 or 0 cents per share in the year-earlier quarter.

Revenue: Rose 37.9% to $695.5 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: salesforce.com inc. was about in line with expectations as the mean analyst estimate was breaking even. It beat the average revenue estimate of $678.1 million.

Quoting Management: “Salesforce.com continues to be the fastest growing software company of its size,” said Marc Benioff, Chairman and CEO, salesforce.com. “Last year we became the first enterprise cloud computing company to achieve $2 billion in revenue, and we’re now poised to deliver the first ever $3 billion year in fiscal 2013.”

Key Stats:

The company has seen double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 36.9%, with the biggest boost coming in the second quarter of the last fiscal year when revenue rose 38.4% from the year earlier quarter.

Last quarter was the fifth in a row that the company saw shrinking gross margins, as they fell 1.4 percentage points from the year-earlier quarter to 78.2%. In that span, margins have contracted an average of 1.9 percentage points per quarter on a year-over-year basis.

After beating analyst estimates for the two previous quarters, the company fell short of forecasts. In the fourth quarter of the last fiscal year, it topped the mark by 5 cents, and in the third quarter of the last fiscal year, it was ahead by 4 cents.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the second quarter is one cent per share, down from 9 cents ninety days ago. The average estimate for the fiscal year is 10 cents per share, down from 41 cents ninety days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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