Salesforce stock drops as guidance disappoints

Published On: December 1, 2021Categories: Stocks & Shares1.3 min read

Salesforce earnings dropped 27% to $1.27 on an adjusted basis, including the Slack acquisition

Salesforce stock tumbled after the software maker reported third quarter earnings and revenue that topped estimates but guidance disappointed. CRM stock reported earnings that for the first time included a full quarter of financials from Slack Technologies.

Meanwhile, San Francisco-based promoted Bret Taylor to act as co-chief executive alongside current CEO Marc Benioff. Taylor has served as Salesforce’s president and chief operating officer since 2019. Prior to that, he was chief product officer.

Earlier, Salesforce had a co-CEO structure. Keith Block, viewed as a possible successor to Benioff, stepped down as co-CEO in early 2020.

Salesforce reported October-quarter earnings after the market close on Tuesday. Salesforce earnings dropped 27% to $1.27 on an adjusted basis, including the Slack acquisition. The deal closed in July.

Revenue jumped 27% to $6.86 billion, including Slack.

A year earlier, Salesforce earnings were $1.74 a share, including investment gains, on sales of $5.42 billion. Analysts expected Salesforce to report earnings of 92 cents a share on sales of $6.8 billion.

The enterprise software maker said current remaining performance obligations, or CRPO bookings, rose 23% to $18.8 billion. That edged by analyst estimates of $18.71 billion.

CRM stock tumbled 5.9% to 268.20 in extended trading on the stock market today. In Tuesday’s regular session, Salesforce stock declined 4% amid a broad market sell-off.

Meanwhile, CRPO bookings are an aggregate of deferred revenue and order backlog. The Salesforce CRPO growth included acquisitions.

For the current quarter ending in January, Salesforce’s revenue outlook met expectations. The software maker expects revenue in a range of $7.224 to $7.234 billion vs. estimates of $7.23 billion.

But the company forecast earnings in a range of 72 cents to 73 cents a share, missing estimates. Analysts had projected a profit of 82 cents a share.

About the Author: Jonathan Adams

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