Salesforce.com Inc. shares rallied in the extended session Tuesday after the customer-relations management software company’s quarterly results and revenue outlook for next year topped Wall Street estimates.
Salesforce CRM, +0.89% shares rose 7.4% after hours, following an initial 3% dip as the earnings report was released. Shares advanced 0.9% to close the regular session at $127.54 Tuesday, compared with a 0.3% rise in the S&P 500 index SPX, +0.33% and a less than 0.1% uptick in the tech-heavy Nasdaq Composite Index COMP, +0.01%
For the fourth quarter, Salesforce said it expects adjusted earnings of 54 cents to 55 cents a share on revenue of $3.55 billion to $3.56 billion, while analysts forecast 57 cents a share on revenue of $3.52 billion.
The company forecast adjusted earnings of $2.60 to $2.61 a share on revenue of $13.23 billion to $13.24 billion for fiscal 2019, and revenue of $15.9 billion to $16 billion for fiscal 2020. Analysts expect earnings of $2.51 a share on revenue of $13.17 billion for fiscal 2019, and revenue of $15.8 billion for fiscal 2020.
“The company provided its initial guidance for FY20 of +20-21% vs. expectations in the 18-20%, which should help quell any concerns about a softening demand environment,” said Evercore ISI analyst Kirk Materne in a note. Materne has a outperform rating and a target price of $170.
On the conference call Tuesday, Salesforce Co-Chief Executive and Chairman Marc Benioff backed up the company’s outlook, saying he doesn’t expect the economy to take a downturn or slip into recession, as some fear.
“I consider to see strong growth because I’ve seen so much investment this year that’s going to pay out for these companies going forward,” Benioff said. “So, I see still several years ahead of good, solid growth for the economy.”
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