Salesforce (CRM) beat across the board in its first quarter earnings reported after the close on Thursday, causing shares to rise 1.7% to $89.29 on Friday morning. The stronger-than-expected results come after Salesforce had warned in its previous earnings report that it would see a slowdown in deferred revenue as a result of seasonality. Instead, deferred revenue, or revenue that has been booked from contracts but not earned yet, increased 26% year-over-year to $5.04 billion.
For the quarter, Salesforce posted adjusted earnings of 28 cents per share on revenue of $2.4 billion, exceeding Wall Street's estimated 26 cents per share and $2.35 billion. Revenue for Sales Cloud, the company's flagship product, grew 14% during the period.
The San Francisco-based company also gave upbeat full-year guidance, saying it expects adjusted earnings in the range of $1.28 to $1.30 per share and revenue between $10.25 billion and $10.30 billion. That's compared to consensus estimates for earnings of $1.29 per share and $10.19 billion, respectively.
Wall Street analysts on Friday said the fiscal first quarter results are incrementally positive, as Salesforce continues to benefit from robust demand for cloud computing products. Here's what they had to say about the quarter:
Steve Koenig, Wedbush Securities (Outperform, Price Target raised to $105 from $102)
"CRM's big 1Q beat and guidance raise was comforting, given investor nervousness about a weak 1Q guide...CRM is one of our top 2017 picks, and we would accumulate based on reliable execution and sustainable growth."
Abhey Lamba, Mizuho (Buy, PT raised to $100 from $95)