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May 28, 2020

Salesforce cuts annual revenue, profit forecasts; shares fall

Jason Del Vicario discusses Salesforce

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Salesforce.com Inc. trimmed its annual revenue and profit forecasts, indicating that the coronavirus-induced recession has weakened demand for the software maker’s cloud applications. Shares declined more than three per cent in extended trading on the news.

Sales in fiscal 2021 will be about US$20 billion, down from an earlier projection of as much as US$21.1 billion, the San Francisco-based company said Thursday in a statement. Analysts, on average, estimated US$20.7 billion.

The company expects profit, excluding some items, of US$2.93 to US$2.95 a share, compared with analysts’ projection of US$3.14.

Chief Executive Officer Marc Benioff, now heading the company solo after co-CEO Keith Block stepped down from his post in February, pledged in March that Salesforce wouldn’t conduct major job cuts for 90 days, and encouraged other CEOs to make the same promise. Earlier this month, the company unveiled software to help businesses safely reopen their offices with systems that manage employees’ shifts and facility cleaning schedules.

Shares fell to a low of US$172.72 in extended trading after closing at US$181.10 in New York. The stock has climbed 11 per cent this year.

In the fiscal first quarter, sales increased 30 per cent to US$4.87 billion from a year earlier. Adjusted profit was 70 cents U a share.