Salesforce Loss Narrows, Q4 Outlook Weak; Stock Down

(RTTNews) - Salesforce.com (CRM) Wednesday reported a smaller loss for the third quarter, led by a 29 percent jump in revenues on greater demand for its cloud computing applications, and topped Wall Street estimates by a penny.

Nevertheless, Salesforce detailed some weak earnings guidance for the current quarter, sending its shares down a near 5 percent in after-hours trade on the New York Stock Exchange.

Salesforce.com, which competes with Oracle Corp (ORCL) and Sap AG (SAP), has been posting losses due to expenses, despite steady growth in revenue. The company has boosted its offerings through prior acquisitions and expanded into adjacent markets.

For the third quarter of fiscal year 2015, Salesforce posted third-quarter net loss of $38.9 million or $0.06 per share, compared with a loss of $124.4 million or $0.21 per share last year.

Excluding stock-based compensation expenses and other items, adjusted earnings for the quarter were $0.14 per share, compared with $0.09 per share a year ago. On average, 36 analysts polled by Thomson Reuters estimated earnings of $0.13 per share for the quarter. Analysts' estimates typically exclude special items.

The San Francisco, California-based company's revenues for the quarter rose to $1.38 billion from $1.08 billion in the prior year.

Thirty-three analysts had a consensus revenue estimate of $1.37 billion for the quarter.

Subscription and support segment revenue rose 28 percent from last year, and professional services climbed 33 percent.

For the fourth quarter of 2015, Salesforce expects adjusted earnings of $0.13 to $0.14 per share on revenues of about $1.44 billion. Analysts currently expect earnings of $0.15 per share on revenues of $1.45 billion.

For the full year 2015, the company expects adjusted earnings of $0.51 to $0.52 per share on revenues of about $5.37 billion. Salesforce had earlier projected earnings in the range of $0.50 to $0.52 per share on revenues of $5.34 billion to $5.37 billion for the year.

Analysts currently expect earnings of $0.52 per share on revenues of $5.370 billion for 2015.

For the full year 2016, Salesforce expects revenue of $6.45 billion to $6.5 billion, while analysts expect $6.66 billion.

Salesforce.com stock closed Thursday at $61.02, down $1.45 or 2.32%, on a volume of 5.5 million shares. In after hours, the stock dropped $2.57 or 4.21%, trading at $58.45.