Is weak guidance enough to warrant a selloff?
Jim Cramer warns investors to look past the immediate market reaction to an earnings report.
"If you think that the balance sheet is not good, and they report weaker number, [such as CenturyLink (CTL - Get Report) ] sell. If you think the balance sheet is good, and they have a history of giving you negative guidance, buy. So, that's the teaching moment. History of negative guidance, send this doc down. Workday (WDAY - Get Report) does the same thing. Buy if the balance sheet's good. History of negative guidance, the balance sheet's bad, sell," Jim Cramer said.
The company posted stronger-than-expected fourth-quarter earnings and raised its revenue guidance for the current financial year, but the cloud company issued near-term earnings guidance that was modestly weaker than analysts' forecasts.
Looking into 2019, Salesforce said it was raising its revenue forecast to a range of $15.95 billion to $16.05 billion and said it expects first-quarter revenue in the range of $3.67 billion to $3.68 billion, just shy of the $3.7 billion forecast. Non-GAAP earnings were forecast in the range of 60 cents to 61 cents a share, largely in-line with Wall Street estimates.