Salesforce.com shares jump after 3Q beat

Salesforce.com shares jump after 3Q beat, but guidance is cautious, as are analysts

Associated Press

NEW YORK (AP) -- Shares of Salesforce.com Inc., which provides software for sales staff over the Internet, climbed Wedneday after its result for the latest quarter exceeded Wall Street forecasts.

THE SPARK: Late Tuesday, the San Francisco company posted a net loss of $220.3 million, or $1.55 per share, for the three months that ended on Oct. 31. That was much wider than last year's loss of $3.8 million in the same period, but that was due to one-time charges.

Excluding one-time effects, Salesforce.com earned 33 cents per share in the latest quarter, a penny above expectations, as polled by FactSet.

Revenue rose 35 percent from last year to $788.4 million. Analysts were expecting $776.6 million.

THE ANALYSIS: The results didn't prompt analysts to make big change their assumptions about the company. Nathan Schneiderman at Roth Capital Partners noted that Salesforce.com's forecast for the new quarter was not above analyst expectations, for the first time since 2010.

Peter Goldmacher at Cowen & Co. pointed to the productivity of Salesforce.com's own sales force declining.

"The business continues to generate impressive growth, but the cost of that growth continues to rise," Goldmacher wrote. He kept an "Underperform" rating on the shares.

SHARE ACTION: Salesforce.com Inc. rose $11.50, or 8 percent, to $157.40 in midday trading. The shares are close to their all-time high of $164.75, hit in April.

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