Salesforce.com Loss Narrows, Revenue Tops Estimates

(RTTNews) - Cloud computing solutions provider Salesforce.com (CRM), Monday posted a third-quarter loss that narrowed from a year ago, helped mostly by a 36 percent jump in revenue and the absence of income tax provision. While earnings for the quarter were in line with Wall Street estimates, revenue surpassed expectations.

Moving ahead, Salesforce.com lifted its revenue and adjusted earnings outlook for 2014, indicating that over the long term, customer demand for next generation social and mobile cloud technologies will spur growth.

Also, the company provided positive revenue outlook for the fourth quarter, even as it expects a net loss for that period, on higher expenses.

Salesforce.com, which competes with bigger rivals Oracle Corp. (ORCL) and Sap AG (SAP), has been posting successive quarterly losses due to expenses that exceed revenue.

During the third quarter, Salesforce.com's revenue rose to $1.08 billion from $788 million last year, due partly to the acquisition of ExactTarget. On average, 37 analysts polled by Thomson Reuters estimated revenue of $1.06 billion for the quarter.

The company said its revenue growth emanated mainly from Americas as also in Europe and Asia.

As of October 2013, its deferred revenue was $1.73 billion, up 34 percent year-over-year.

The San Francisco, California-based company posted a third-quarter net loss of $124.4 million or $0.21 per share, compared with a net loss of $220 million or $0.39 per share last year.

Results for the recent quarter included, among other items, $142 million in stock-based compensation expense, while the prior year had such expense of $105 million and unfavorable tax adjustments of $132 million.

Excluding items, adjusted earnings for the quarter were $57.6 million or $0.09 per share, compared with $49.6 million or $0.08 per share a year ago. Forty-one analysts had a consensus earnings estimate of $0.09 per share for the quarter. Analysts' estimates typically exclude special items.

Results were largely offset by operating expenses that increased to $905.8 million from $656 million in the prior year.

For the fourth quarter, the company expects a net loss of $0.25 to $0.24 per share, adjusted earnings of $0.05 to $0.06 per share and revenue of $1.124 billion to $1.129 billion. Analysts currently estimate earnings of $0.07 per share on revenue of $1.12 billion for the quarter.

For fiscal 2014, the company now expects net loss of $0.45 to $0.44 per share, adjusted earnings of $0.33 to $0.34 per share and revenue of $4.050 billion to $4.055 billion.

Salesforce.com earlier estimated a net loss of $0.44 to $0.42 per share, adjusted earnings of $0.32 to $0.34 per share and revenue of $4.00 billion to $4.03 billion. Analysts currently expect earnings of $0. 34 per share on revenue of $4.03 billion for 2014.

For fiscal 2015, the company expects revenue of $5.15 billion to $5.20 billion, while analysts expect $5.19 billion.

CRM closed Monday at $55.51, down $1.81 or 3.16%, on a volume of 12.8 million shares on the NYSE. In after hours, the stock gained $0.22 or 0.40% at $55.29. In the past year, the stock has traded in the range of $36.09 - $58.37.