Salesforce.Com Inc. (CRM - Get Report) shares jumped Wednesday after the customer relationship management software group posted stronger-than-expected third quarter earnings, and boosted its near-term outlook, as cloud computing computing sales continued to impress.
Salesforce said adjusted earnings for the three months ended in October came in at 61 cents a share, well ahead of the Street consensus of 50 cents and up 45% from the same period last year. Group revenues, the company said, grew by 25.6% to $3.39 billion, the bulk of that coming from its subscription and support business. Salesforce said its sees 2020 revenues as high as $16 billion, putting it on track to meet its 2022 target range of $21 billion to $23 billion.
"We are clearly executing on our vision of transformation and success for our customers, and we are doing it at scale," CEO Keith Block told investors on a conference call late Tuesday. "Our industry strategy, which is all about speaking the language of the customer, continues to drive exceptional growth."
Salesforce shares rose 5.3% on Wednesday.
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Salesforce initiated fourth-quarter revenue guidance of $3.55 billion to $3.56 billion. The company raised its fiscal 2019 revenue guidance to $13.23 billion to $13.24 billion. And it initiated fiscal year 2020 revenue guidance of $16 billion.
The company said remaining performance obligation, which represents future revenue under contract but not yet recognized, grew 34% year over year to $21.2 billion.
"While the bottom line is a bit lighter than what analysts were forecasting, we think investors should not be fooled, wrote analysts on TheStreet's Action Alerts Plus team. "Overall, this was a great quarter for the company with solid beats across the board. Not only did the company outpace the customer relationship management market again, but it also continues to gain share."