NEW YORK ( TheStreet) -- Salesforce.com (CRM - Get Report) shares surged in early trading, gaining 9.3% to $47.70 after the cloud computing company posted results that were largely better than expected, and the company raised its outlook for the rest of fiscal 2014.
For fiscal 2014, Salesforce said it now expects to generate between $4 billion and $4.025 billion in sales. Analysts polled by Thomson Reuters are looking for revenue to be $4 billion.
The company expects to generate earnings for the full year of between 32 cents and 34 cents a share.
Not only did the San Francisco-based Salesforce raise its outlook for the rest of its fiscal year, fiscal second-quarter results beat estimates, aided by strength in subscription and support revenue. The company generated $957 million in revenue in the second quarter, aided by subscription and support revenue, which generated $903 million, an increase of 31% on a year-over-year basis.The company earned 9 cents a share on a non-GAAP basis, better than the 7 cents analysts were estimating. "Salesforce.com continues to be the fastest growing software company of its size with year-over-year growth of more than 30% in revenue, deferred revenue, and operating cash flow," CEO Marc Benioff said in a statement. "I'm delighted to announce that just four years after delivering our first $1 billion revenue year, we are now poised to deliver our first $1 billion revenue quarter in the third quarter of fiscal 2014." Following the results, several analysts on Wall Street raised their price targets, noting more good news was likely to come. Here is what several of them had to say: Canaccord Genuity analyst Richard Davis (Buy, $54 PT) "Salesforce's Q2/14 results were nicely ahead of forecasts across the board. The firm remains by a wide margin the fastest growing company of its size, and with the addition of marketing automation functionality and still nascent adoption of its platform capabilities, we believe CRM should be able to keep its impressive growth trajectory relatively intact for at least the next 6-8 quarters. The combination of a reasonable valuation and likely favorable commentary into and following upcoming customer events -- ExactTarget Connections in September and Dreamforce in November -- sets the stock up for a nice run through year-end. CRM is one of our top picks and should be a core growth holding for software investors. Reiterate BUY, increasing target to $54.00." Lazard Capital Markets analyst Joel P. Fishbein (Buy, $52.50 PT) "F2Q results came in well ahead of expectations even excluding the positive impact from the ExactTarget acquisition. Though it's still early going, the ET addition is already ahead of plan resulting in both sales and cost synergies which led to management raising its FY guidance. Given the size of the acquisition and the relative maturity of the sales cloud, the marketing cloud has clearly become the focal point of the company's nearterm growth strategy. With ET, salesforce.com has immediately asserted itself as a leader in both B2C and B2B marketing which are poised for significant growth over the next several years as the CMO becomes a more meaningful IT consumer. We believe this positions Salesforce.com for sustainable above average growth for the foreseeable future." Oppenheimer analyst Brian Schwartz (Outperform, $55 PT) "Salesforce.com reported a very good quarter with 30%+ growth in organic billings, cash flow, deferred revenue, backlog and raised its annual guidance. These metrics reflect strong demand trends when considering CRM's size, consistent with our preview. Bottom Line: We believe the levers salesforce.com is pulling to spur an industry transformation of customer connection strategies, along with slightly easier comparisons, two customer conferences to monetize on, and transitory 2Q behind us, set CRM up nicely for a second half that is stronger than the first. Salesforce.com should also gain revenue synergies from adding ExactTarget's products to its leading technology vision that is striking a positive chord with an end-market's insatiable desire to replace client-server products with best-of-breed SaaS applications." -- Written by Chris Ciaccia in New York >Contact by Email. Follow @Chris_Ciaccia