Salesforce Q3 Profit Tops Estimates, Shares Rise

Shares of

surged over 3 percent in after-hours trading after the company reported stronger-than-expected earnings for the third quarter on Wednesday. The San Francisco, California-based company reported a quarterly loss of $25.2 million, or $0.04 per share, versus a year-ago loss of $38.9 million, or $0.06 per share. Excluding items, the company's adjusted earnings came in at $0.19 per share. Its total revenue climbed 24 percent year-over-year to $1.71 billion. However, analysts were expecting earnings of $0.19 per share on revenue of $1.7 billion. The average estimate among 184 Estimize users was for earnings of $0.20 per share and revenue of $1.71 billion. Subscription and support revenue surged 24 percent to $1.60 billion, while professional services and other revenue jumped 22 percent year-over-year to $116 million. At the end of the quarter, the company had $2.30 billion in total cash, cash equivalents and marketable securities. "Salesforce delivered yet another exceptional quarter with 27% constant currency growth in revenue and 30% constant currency growth in deferred revenue," said Marc Benioff, Chairman and CEO, Salesforce. "I'm delighted to announce that we expect to deliver our first $8 billion year during our fiscal year 2017, which puts us well on the path to reach $10 billion faster than any other enterprise software company." The company expects Q4 adjusted earnings of $0.18 to $0.19, on revenue of $1.782 billion to $1.792 billion. Analysts projected earnings of $0.19 per share on revenue of $1.78 billion. For FY16, Salesforce projects adjusted earnings of $0.74 to $0.75 per share, on revenue of $6.64 billion to $6.65 billion. Analysts expected earnings of $0.73 per share on revenue of $6.62 billion. The company projects FY17 revenue of $8.0 billion to $8.1 billion. Salesforce shares gained 3.42 percent to $80.04 in the after-hours trading session.