After suffering from losses over last six quarters, Salesforce.com, inc. (NYSE:CRM) has broken the streak. The firm reported an upbeat first quarter results. The company also boosted its full year guidance in revenue. Salesforce has been a subject of takeover over the recent weeks after one potential buyer reached the firm. But any big firm didn’t officially show its interest in this rich asset.
The company’s profit margins didn’t seem consistent in the past few years despite strong revenue growth due larger cash flow, which includes appointments of sales employees which play an important role in underperformance of the company.
“I think what investors will be very enthusiastic about tomorrow is how much margin upside there was,” FBR Capital Markets analyst Samad Samana said.
Net income of the firm stood at $4.1 million, or 1 cent per share, for the first quarter through April 30, compared with a loss of $96.9 million, or 16 cents per share, the firm suffered in a year earlier period. Revenue grew 23 percent to $1.51 billion.
The San Francisco California-based company clutched the first spot from SAP in market in customer service and support domain, according to Chief Executive Marc Benioff in a conference call.
“Sorry about that, SAP,” Benioff said.
SAP CEO Bill McDermott said that Salesforce assets were highly inflated and valued, so it was unlikely to be acquired.
Microsoft Corp, Oracle Corp, IBM and SAP have been among potential buyers of that asset worth about $45.6 billion. Anyone who buys this asset no doubt rule the cloud computing industry as Salesforce made a name for itself in this field.
The increased transformation of businesses into cloud-based servers that cost less as well as easier to cope, has helped Salesforce a lot to up surge in this domain.
In the first quarter, there was particular strength in Service Cloud, Salesforce’s second-largest revenue source, Samana said.
“Marketing cloud, which is something they’ve only been doing for the last few years, was another high growth area.”
Adjusted earnings were 16 cents per share, conquering analysts’ forecast of 14 cents.
Salesforce now expects earnings this year to be in a range of $6.52 billion-$6.55 billion, whereas back in January the firm forecasted revenue of $6.48 billion-$6.52 billion for the current year. Thomson Reuters Data showed that analysts’ were expecting $6.51 billion in revenue.
