(Bloomberg) -- Salesforce.com Inc. gave a profit forecast that fell short of Wall Street’s estimates, signaling that the software maker’s big-ticket acquisition of Tableau and global expansion have spurred rising costs.
Earnings, excluding some items, will be 54 cents to 55 cents a share in the current quarter, short of analysts’ average estimate of 62 cents. Shares declined about 2% in extended trading.
Still, the expansion helped fuel company revenue growth. Sales gained 33% to $4.51 billion in the period ended Oct. 31, the San Francisco-based company said Tuesday in a statement. Analysts projected $4.46 billion. It was Salesforce’s first quarter of more than 30% year-over-year growth since April 2014.
Chief Executive Officers Marc Benioff and Keith Block have made acquisitions a key part of the customer-relations software company’s strategy to increase sales, highlighted by the purchase of Tableau Software Inc., which generated $1.15 billion in revenue last year making analytics tools. The company also has forged partnerships with major cloud vendors such as Microsoft Corp. and Amazon.com Inc. to make its software more ubiquitous.
Shares declined to a low of $156.25 in extended trading after closing at $161.57 in New York. The stock has climbed 18% this year.
Profit, excluding some items, was 75 cents a share in the fiscal third quarter. Analysts, on average, projected 66 cents.
To contact the reporter on this story: Nico Grant in San Francisco at ngrant20@bloomberg.net
To contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Andrew Pollack, Molly Schuetz
©2019 Bloomberg L.P.
Advertisement