Salesforce.com Drops 5% After Q2 Results

Leading cloud computing company Salesforce.com

released its fiscal second-quarter earnings results after the closing bell on Thursday. Salesforce.com is one of the most highly valued companies on the Nasdaq exchange in terms of its earnings. As a result of its rapid growth and investor expectations of an even brighter future, CRM trades at a forward P/E above 70. Analysts anticipate that Salesforce will grow its revenues by over 26% next year. The company's second-quarter earnings results beat analysts' expectations, but the stock is trading lower in the after-hours, likely because of CRM's third-quarter guidance. The company reported a net loss for the second-quarter of $9.83 million or $0.07 per share, compared to a loss of $4.27 million or $0.03 per share, in last year's corresponding quarter. On an adjusted basis, which is comparable to analysts' consensus, Salesforce earned $60.72 million or $0.42 per share, compared to compared to $43.08 million or $0.30 per share in the prior-year quarter. This exceeded Wall Street analysts' consensus EPS expectations of $0.39. Revenues in the quarter rose to $731.65 million versus $546.0 million in last year's second-quarter. This also came in ahead of analysts' consensus estimates of $728.32 million. Looking ahead, the company said that it expects adjusted earnings per share between $0.31 and $0.32 on revenues of $773 million to $777 million. The EPS guidance is below analysts' consensus of $0.34 and is likely causing the weakness in the stock. The revenue range is above current consensus of $771.34 million. Salesforce.com also revised its full-year GAAP earnings guidance to a loss of $0.75 to $0.72 compared to previous guidance calling for a loss of $0.48 to $0.45. On an adjusted basis, however, the company raised its fiscal year outlook. Salesforce now expects adjusted earnings per share between $1.48 to $1.51 compared to its prior estimate of $1.45 to $1.49. Revenues are expected to be between $3.025 billion to $3.035 billion versus its previous estimate of $2.990 billion to $3.025 billion. Currently, analysts anticipate that CRM will earn $1.49 per share on revenues of $3.02 billion for the fiscal year. In Thursday's after hours trading session, have lost a little more than 5% to $139.00.