What To Expect From Salesforce's Earnings This Quarter

Salesforce is scheduled to release its quarterly results after the close Tuesday.

Analysts Michael Nemeroff, Christopher Rochester and Alexander Hu said they expect second quarter revenues to come in slightly above the Street estimate of $2,513 million and its estimate of $2,518 million.

The analysts expect earnings per share to be in line or slightly above the consensus estimate of 32 cents and the company's guidance of 31–32 cents, with earnings likely to be pressured by acquisition-related expenses.

On other metrics and the outlook, Credit Suisse's expectations are as follows:

• FQ2 Billings: $2,141 million; up 16.9 percent year over year, driven by an estimated increase of 22 percent in deferred revenues to $4,665 million.
• Deferred revenues to be positively impacted by forex.
• Consensus estimate for fiscal third quarter deferred revenues conservative, given certain one-time deferred revenue benefits in the prior year fiscal Q3.
• Credit Suisse estimates fiscal Q3 deferred revenues of $4,150, up 18.7 percent year over year but down 11 percent quarter over quarter.

Credit Suisse sees the company has significant OCF potential over the next few years, realizable from the company's large market opportunity, continued market share in its cloud offerings, significant cross-sell/up-sell opportunities of new products/services and increased operating leverage over time.