San Francisco: Salesforce.com Inc., the biggest seller of internet-based customer-management software, reported a 13-fold gain in first-quarter profit and raised its forecast after the company added 2,600 customers.
Net income climbed to $9.56 million, or 8 cents a share, from $730,000, or 1 cent, a year earlier, the San Francisco-based company said in a statement on Thursday. That beat the 7-cent average estimate in a Bloomberg survey of analysts.
Software buyers, hesitant to make big purchases as the economy slows, are subscribing to the company's so-called on-demand programs, delivered online at a lower cost. Chief Executive Officer Marc Benioff also is encouraging businesses to build their own applications using Salesforce.com's system, making it harder to switch to a competitor.
"It's a solid quarter - not a blowout quarter, but a solid one," Sasa Zorovic, a New York-based analyst with Goldman, Sachs & Co., said in an interview. He advises investors to sell the shares because they're expensive. "They really did well across the board."
Salesforce.com climbed 14 cents to $62.80 in extended trading after closing at $62.66 on the New York Stock Exchange. The shares are little changed this year.
Sales rose 52 per cent to $247.6 million last quarter, which ended April 30. Analysts had predicted $235.3 million on average.
For the current quarter, profit will be 7 cents to 8 cents a share on sales of $258 million to $259 million, the company said. Analysts estimated profit of 8 cents and sales of $249.9 million, according to the Bloomberg survey.
Forecast
Salesforce.com raised its full-year sales forecast to between $1.06 billion and $1.07 billion. Earnings will be 33 cents to 34 cents a share, the company said. In February, Salesforce.com had projected a profit of 32 cents to 33 cents a share on sales of as much as $1.04 billion.
The company boosted its total number of paying customers last quarter to about 43,600.
Deferred revenue, payments for services that haven't been delivered yet, fell 2.2 per cent from the previous three months. It was the first time in Salesforce.com's history that deferred revenue declined, said Peter Goldmacher, a San Francisco-based analyst for Cowen & Co.
