Salesforce.com Inc. cut its full-year earnings outlook as the company said it provided payment relief to some customers and made new investments in the face of the coronavirus pandemic. The provider of subscription-based business software said Thursday that first-quarter sales rose 30% from a year earlier to a record $4.87 billion. Earnings per share fell to 11 cents—aided by accounting adjustments—from 49 cents. Wall Street expected sales of $4.85 billion and per-share earnings of 1 cent, according to analysts surveyed by FactSet.

The San Francisco company lowered its full-year outlook at a time of economic uncertainty from the global health crisis that has caused many companies to withdraw full-year projections. Salesforce said it now expects full-year sales of roughly $20 billion. It previously forecast revenue in the range of $21 billion to $21.1 billion. This year’s expected full-year sales growth of 17% would represent Salesforce’s slowest pace of expansion. Sales advanced 29% in the most recent fiscal year.

“Our results, amidst this global crisis, demonstrated our ability to execute at speed, innovate at scale and the strength of our business model,” said Salesforce CEO Marc Benioff. “The pandemic showed us that digital is an imperative for every company, and we’re confident Salesforce will continue to accelerate as we bring our customers into the new normal.”

For the current quarter, analysts are looking for earnings of 75 cents a share on revenue of $5.05 billion for the current quarter. Salesforce responded with a revenue range of $4.89 billion to $4.90 billion and earnings between 66 and 67 cents per share. In other news, Salesforce announced that AT&T signed up as a customer of Salesforce’s Customer 360 platform.

During the pandemic, many customers of cloud software providers have increased usage as more companies have embraced remote working and the tools that facilitate such operations. But many software service providers also have said that signing new contracts has slowed during the pandemic, as negotiations drag on with customers grappling with how to adjust to the economic downturn. Workday Inc., another enterprise software provider, on Wednesday cut its subscription-revenue forecast for the current fiscal year because of the market uncertainties.

Todd Horwitz Chief Strategist BubbaTrading.com
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