Dividend.com: Salesforce.com Letdown

Salesforce.com First-Quarter Earnings Beat Estimates, but Lowered Guidance Disappoints

Sales management software-maker Salesforce.com(CRM Quote) said Thursday that its first-quarter profit almost doubled, as sales rose 23% from last-year's levels, but its shares plummeted as the company lowered its full-year guidance for the second time.

The San Francisco-based company reported first-quarter net income of $18.4 million or 15 cents per share, up 92% from $9.6 million or 8 cents per share in the year-ago period. Revenue jumped 23% to $304.9 million from $247.6 million in the same quarter last year.

Both quarterly profit and revenue results beat analysts' expectations. On average, Wall Street analysts expected a profit of 11 cents per share on revenue of $304.7 million. Salesforce.com said that subscription and support revenue gained 25% percent in the period to $281.8 million, while professional services and other revenue rose a more modest 4%, to $23.1 million.

Looking ahead, the company predicted a second-quarter profit of 14 to 15 cents per share on revenue of $312 million to $313 million. Analysts expect 13 cents on $319.2 million in revenue.

Salesforce.com's full-year guidance was the enduring story from the report, however. The company lowered its full-year 2009 revenue guidance for the second time to a range of $1.25 billion to $1.27 billion, despite raising its EPS guidance to 59 cents to 60 cents. Analysts were expecting full-year profits of 55 cents per share on higher revenue of $1.31 billion. The lowered guidance sent Salesforce.com's shares down $3.07 or 7.8%, in morning trading Friday.

Shares of Salesforce.com are nearly 50% off the 52-week high of $74 a share. The stock has technical support in the $31 to $32 price area. If the stock can bounce back after today's drop, we see overhead resistance around the $45 price level. We do not currently rate this non-dividend paying stock, but do watch the tech software giant closely.