Salesforce Earnings Preview: What Jim Cramer Is Watching

Salesforce is slated to report earnings after the bell. Here's what Jim Cramer will be watching.
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Salesforce will report earnings after the bell on Thursday, May 28. 

Analysts polled by FactSet are expecting earnings of 69 cents per share on revenue of $4.85 billion for the quarter ending April 30, with nearly all having lowered estimates for the CRM giant in recent weeks.

TheStreet's Annie Gaus broke down what she's watching when Salesforce releases earnings. 

The first major theme? Demand outlook. 

Analysts are anticipating muted sales growth for its first fiscal quarter, which ended April 30, followed by a slight uptick to $5.03 billion for the second quarter. Rosenblatt Securities analyst Yun Kim, who recently initiated coverage of Salesforce with a sell rating, wrote this month that “large scale business application deployment is becoming a lower priority among large organizations,” which have been a key growth driver for Salesforce in recent years, Gaus wrote. 

Then, obviously, comes the company's response to the COVID-19 pandemic. 

Gaus noted that, in the current environment, Salesforce has pivoted quickly to spin up new initiatives and partnerships that could help to mitigate any impact to its core cloud offerings. One such initiative is two recently announced deals with California and New York City to help provide software to manage contact tracing, which triggered an uptick in shares after the partnerships were announced earlier this month. 

And then there are the organizational changes. 

The past few months have brought a number of changes to Salesforce, both related to the pandemic and not. One was the surprise departure of Keith Block, who had served as co-CEO alongside Marc Benioff and the head of Salesforce’s sales group. Gavin Patterson, who formerly led Salesforce International, was recently elevated to president and sales lead, Gaus wrote.

"You want to hear about how many orders they're getting for their Work.com," said Jim Cramer. 

You can follow Jim Cramer and Katherine Ross on Twitter at @JimCramer and @byKatherineRoss. Read more from Katherine Ross here.

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