Salesforce
- Salesforce.com shares rose Thursday after second-quarter earnings and guidance beat expectations.
- The company, which recently purchased Slack, sees third quarter adjusted earnings of $0.91-$0.92 a share.
- Second quarter adjusted earnings of $1.48 a share were ahead of an estimated $0.92 a share.
- See more stories on Insider's business page.
Salesforce.com shares moved higher Thursday after the software maker's second-quarter results came in ahead of analyst expectations and the company raised its profit view after completing the $28 billion purchase of workplace communications service Slack.
The company's second-quarter adjusted earnings were $1.48 a share for the period ended July 31, above the Refinitiv forecast of $0.92 a share. Revenue rose by 23% to $6.34 billion, ahead of expectations of $6.24 billion and aided by growth in subscription and support sales in part from its Mulesoft and Tableau products.
Salesforce.com forecast third-quarter per-share adjusted earnings of $0.91 to $0.92 on revenue of $6.78 billion to $6.79 billion. Analysts were looking for $0.82 a share on sales of $6.66 billion.
Shares gained 3.8% to $271.15 as trading got underway Thursday. The stock this year has advanced by 17% through Wednesday's session, which marked the highest closing price since October.
Salesforce's outlook follows the July 21 closing of its acquisition of Slack. "There could not be a more relevant product at a more relevant time for every single one of our customers," as the workforce landscape is changing and customer services such as contact centers have gone digital, said Bret Taylor, COO of Salesforce.com, during Wednesday's analyst call.
"With the Slack acquisition now closed, we see potential for investor sentiment to shift incrementally more positive following [operating margin] improvement and look for detail regarding the pace of OM expansion going forward at the company's analyst day next month," Kash Rangan, an equity analyst at Goldman Sachs, said in a note to clients reiterating its buy rating.
The company's adjusted operating margin was 20.4% compared with 20.2% a year earlier.
Salesforce's CEO Marc Benioff in responding to a question told analysts he doesn't see the spread of the Delta variant of the coronavirus as material to the business.
"If anything, it only accelerates it. And Delta is not the last -- the last one of these things that we're going to see. We're seeing a constant now parade of these variants going by. We started with Alpha," he said.