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Salesforce (CRM) sinks 6% on EPS miss and outlook

By Robert Davis

21:52, 30 November 2021

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Laptop computer displaying logo of, an American cloud-based software company - Photo: Shutterstock

Salesforce’s stock lost more than 6% in value during after-hours trading on Tuesday after the company missed Wall Street’s per-share earnings estimates and lowered its outlook in its quarterly earnings statement.

CRM stock is down 5.8% over the last four weeks but it is still up more than 20% over the last six months despite the recent downturn.

Earnings details

According to the company’s fiscal third quarter 2022 earnings, Salesforce brought in $6.8bn in revenue and diluted earnings per share (EPS) of $0.47.

The San Francisco, California-based company’s revenue total represents growth of 27% on an annualised basis while its EPS totals shrank by approximately 60%.

For comparison, 37 analysts surveyed by Yahoo Finance estimated the company would report $6.8bn in revenue and EPS of $0.92.

The company saw its cost of revenue increase significantly during Q3 to $$1.8bn, up from the $1.3bn figure it posted last year. At the same time, the company’s total operating expenses grew to $4.9bn compared to $3.8bn in Q3 2021.

Marc Benioff, CEO of Salesforce, described the company’s financial results as a “phenomenal quarter.”


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“Salesforce is more relevant and strategic than ever as every company accelerates their digital transformation journey,” Benioff said. “Just as we’ve helped our customers navigate the pandemic, we’re now guiding them toward greater growth, customer success, health and safety, and trust.”

Benchmark woes

Despite the solid revenue growth, Salesforce has struggled to keep up with its benchmarks in recent trading sessions.

Ahead of the earnings announcement, Salesforce stock dropped 3.9% or more than $11 per share compared to the 2.46% drop for the Dow Jones Software Index.

Salesforce’s 5.8% decline over the last month also leads the index by more than 2%.


Looking ahead to the fourth fiscal quarter, Salesforce expects to bring in revenue between $5.66bn and $5.67bn, representing approximately 17% year-over-year growth.

For the full year, the company expects to earn $21bn in revenue. This projection is more than $5bn below its full-year projection of $26bn from last quarter.

Read more: Salesforce (CRM) stock price climbs on upcoming report

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The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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