Wunderlich's Highlights Of Salesforce Earnings

Salesforce.com, inc. CRM’s better-than-expected third-quarter results and upbeat guidance have eased investor concerns after the company’s shaky second quarter and an M&A spending-spree.

Q3 Print Highlights

The strong numbers and buoyant forward projections have sent the shares of enterprise cloud computing company up more than 7 percent in the Friday’s pre-market hours.

Following are the highlights from salesforce’s results:

• Q3 Revenue/EPS of $2.14 billion/$0.24, topped consensus of $2.12 billion/$0.21.
• Closed “record number” of seven-figure+ deals, closed seven large financial services customers.
• Deferred revenue grew 23 percent to $3.50 billion, above consensus of $3.42 billion.
• Unbilled deferred revenue rose over 28 percent to $8.6 billion, including about $350 million from Demandware.
• Billings rose 20 percent to $1.82 billion, beat consensus view of $1.72 billion.
• Guides Q4 revenue at $2.267 billion–$2.277 billion, above consensus of $2.24 billion.
• Sees Q4 EPS at $0.24–$0.25, slightly below consensus of $0.25 at the midpoint.
• Raises FY 2017 revenue guidance to a range of $8.365 billion–$8.375 billion from $8.275 billion–$8.325 billion and EPS view to $0.97–$0.98 from $0.93–$0.95.
• Sets $10 billion plus revenue target for FY 2018.

Analyst's Take

“We are reiterating our Buy rating and $101 price target as we continue to believe CRM should be a core portfolio holding for all tech investors,” Wunderlich analyst Ryan MacDonald wrote in a note.

MacDonald also raised his FY 2017 revenue estimate to $8.370 billion from $8.298 billion and EPS forecast to $0.98 from $0.94.

Shares of Salesforce closed Thursday’s trading at $75.19. In the pre-market hours Friday, they were seen to have gained 7.73 percent to $81.