NEW YORK (TheStreet) -- Shares of Salesforce.com (CRM) were gaining 3.5% to $72.61 after-hours Wednesday after the cloud software company beat analysts' estimates for earnings in the first quarter of fiscal 2016.
Salesforce reported earnings of 16 cents a share for the first quarter, above analysts' estimates of 14 cents a share for the quarter. Revenue grew 22.8% year over year to $1.51 billion for the quarter, compared to analysts' estimates of $1.5 billion.
Looking forward to the second quarter of fiscal 2016, Salesforce expects earnings of 17 cents to 18 cents a share and revenue of $1.59 billion to $1.6 billion. Analysts expect earnings of 17 cents and revenue of $1.59 billion for the quarter.
Salesforce expects earnings of 69 cents to 71 cents a share and revenue of $6.53 billion to $6.55 billion for fiscal year 2016. Analysts expect earnings of 69 cents and revenue of $6.51 billion for the fiscal year.
"Salesforce has surpassed the $6 billion annual revenue run rate faster than any other enterprise software company, and our current outlook puts us on track to reach a $7 billion revenue run rate later this year," Chairman and CEO Marc Benioff said. "Our goal is to be the fastest to reach $10 billion in annual revenue."
TheStreet Ratings team rates SALESFORCE.COM INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate SALESFORCE.COM INC (CRM) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and increase in net income. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet."