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Salesforce (CRM) to Report Q2 Earnings: What's in Store?
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Salesforce.com Inc. (CRM - Free Report) is slated to release second-quarter fiscal 2019 results on Aug 29.
Notably, Salesforce delivered positive earnings surprise in the trailing four quarters, with an average positive surprise of 19.7%.
In the last reported quarter, the company reported non-GAAP earnings of 74 cents per share, which comprehensively beat the Zacks Consensus Estimate of 46 cents and increased more than twofold from the year-ago quarter.
Revenues of $3.006 billion increased 25% year over year and surpassed the Zacks Consensus Estimate of $2.940 billion.
For second-quarter fiscal 2019, revenues are projected between $3.22 billion and $3.23 billion, an increase of 25% year over year. Non-GAAP earnings are expected in the range of 46–47 cents per share.
The Zacks Consensus Estimate for the quarter is pegged at 47 cents, reflecting a year-over-year increase of 42.4%. The Zacks Consensus Estimate for sales of $3.23 billion indicates around 26.2% growth from the prior-year quarter.
So, let’s see how things are shaping up prior to this announcement.
Factors at Play
Salesforce’s diverse cloud offerings, expanding partner base and considerable spending on digital marketing are key growth drivers.
Additionally, acquisitions have always been one of Salesforce’s key growth strategies, strengthening the company’s position in the customer relationship-management solution-providing space. We expect acquisition synergies to bolster second-quarter quarter results as well.
Notably, the acquisition of MuleSoft is a major positive. The company’s recent acquisition of its long-time partner CloudCraze, a B2B ecommerce platform, will also be accretive for the company’s financials.
Management is extremely optimistic about enhancement of customer experience that has aided growth of the cloud segment. Artificial intelligence (AI) related innovations have further boosted the segment with Einstein Analytics providing helpful insights.
Salesforce has also been keen on building partnerships to expand its international operations. Partnership agreements with the likes of Amazon (AMZN - Free Report) and Alphabet for the firms’ cloud services have been helping it expand its international operations.
We note that during the last few quarters, the company won several deals due to its international expansion initiatives. It is likely that the company will continue winning international deals, which will drive its fiscal second-quarter results.
However, stiff competition from Microsoft (MSFT - Free Report) and Oracle (ORCL - Free Report) in the cloud-based CRM market poses significant threat. Salesforces generates only about 30% of total revenues from international operations, while the rivals generate around 50%.
What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or #5 (Strong Sell) stocks are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Salesforce currently carries a Zacks Rank #3 and has an Earnings ESP of 0.00%.
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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Salesforce (CRM) to Report Q2 Earnings: What's in Store?
Salesforce.com Inc. (CRM - Free Report) is slated to release second-quarter fiscal 2019 results on Aug 29.
Notably, Salesforce delivered positive earnings surprise in the trailing four quarters, with an average positive surprise of 19.7%.
In the last reported quarter, the company reported non-GAAP earnings of 74 cents per share, which comprehensively beat the Zacks Consensus Estimate of 46 cents and increased more than twofold from the year-ago quarter.
Revenues of $3.006 billion increased 25% year over year and surpassed the Zacks Consensus Estimate of $2.940 billion.
For second-quarter fiscal 2019, revenues are projected between $3.22 billion and $3.23 billion, an increase of 25% year over year. Non-GAAP earnings are expected in the range of 46–47 cents per share.
The Zacks Consensus Estimate for the quarter is pegged at 47 cents, reflecting a year-over-year increase of 42.4%. The Zacks Consensus Estimate for sales of $3.23 billion indicates around 26.2% growth from the prior-year quarter.
Salesforce.com Inc Price and EPS Surprise
Salesforce.com Inc Price and EPS Surprise | Salesforce.com Inc Quote
So, let’s see how things are shaping up prior to this announcement.
Factors at Play
Salesforce’s diverse cloud offerings, expanding partner base and considerable spending on digital marketing are key growth drivers.
Additionally, acquisitions have always been one of Salesforce’s key growth strategies, strengthening the company’s position in the customer relationship-management solution-providing space. We expect acquisition synergies to bolster second-quarter quarter results as well.
Notably, the acquisition of MuleSoft is a major positive. The company’s recent acquisition of its long-time partner CloudCraze, a B2B ecommerce platform, will also be accretive for the company’s financials.
Management is extremely optimistic about enhancement of customer experience that has aided growth of the cloud segment. Artificial intelligence (AI) related innovations have further boosted the segment with Einstein Analytics providing helpful insights.
Salesforce has also been keen on building partnerships to expand its international operations. Partnership agreements with the likes of Amazon (AMZN - Free Report) and Alphabet for the firms’ cloud services have been helping it expand its international operations.
We note that during the last few quarters, the company won several deals due to its international expansion initiatives. It is likely that the company will continue winning international deals, which will drive its fiscal second-quarter results.
However, stiff competition from Microsoft (MSFT - Free Report) and Oracle (ORCL - Free Report) in the cloud-based CRM market poses significant threat. Salesforces generates only about 30% of total revenues from international operations, while the rivals generate around 50%.
What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or #5 (Strong Sell) stocks are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Salesforce currently carries a Zacks Rank #3 and has an Earnings ESP of 0.00%.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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