Salesforce Earnings Double in Q3

SAN FRANCISCO ( TheStreet) -- Cloud-computing pioneer Salesforce ( CRM) has doubled its net income for the third quarter, as its long list of customers continues growing faster than ever.

Net income for the quarter climbed to $20.7 million or 16 cents a share. It was a sharp rise from last year's net income of $10.1 million or 8 cents a share, and in line with analysts estimates.

The company added nearly 5,000 customers in the third quarter, increasing its client base to almost 70,000, while citing low attrition. It now has major data centers in the West Coast, East Coast and Singapore.

Revenue rose 20% to $331 million. International revenue flowing from Europe and Asia reached 30 percent of the company's total revenue. Salesforce increased hiring in the third quarter to position itself for growth in the fourth quarter.

Subscription and support revenues came in at $306.9 million, a 21 percent gain over the previous year. Deferred revenue rose to $545.4 million, 16 percent higher than the same time last year, reflecting an increase in new sales.

Company executives say that the growth of cloud computing is clearly outpacing traditional web-hosting platforms. Customers have built 10,000 web sites with Salesforce.com, generating 170 million page views.

Investors' optimism about the company is partly fueled by excitement over a new product that Salesforce and Cisco ( CSCO) will jointly release in January. With Salesforce's strength in online customer relationship management and Cisco's dominance in the networking arena, they are working to create a service that will allow call centers to connect with customers and resolve their queries over the Internet.

Since its inception in 1999, the San Francisco-based company has steadily gained a reputation for being a pioneer of software development, particularly in the area of customer service. As of July, Salesforce has managed customer information for well-known companies like Allianz Commercial, Dell, Dow Jones Newswires and Kaiser Permanente.

Shares of Salesforce closed 1.85% lower at $65.61 as the major indices retreat from a 13-month rally.

Bleak October economic data was announced today, with the Commerce Department publishing a lower-than-expected rise in its producer price index and a disappointing industrial output announcement from the Federal Reserve. Earlier today major home-improvement retailer Home Depot ( HD) announced lower third-quarter sales.

Cisco shares were changing hands 0.92% higher at $24.09 at the market's close.

-- Reported by Andrea Tse in New York

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