By RTT News, February 28, 2013, 06:19:00 PM EDT
(RTTNews.com) - Salesforce.com Inc ( CRM ) Thursday reported a wider loss for the fourth quarter, as the cloud computing company continued to incur stock-based compensation expense and other overheads. Nevertheless, adjusted profit for the quarter came in well ahead of Wall Street expectations, as steady growth in subscription revenues lifted topline by 32 percent.
Moving forward, Salesforce.com raised its revenue outlook for fiscal year 2014, reflecting growth prospects the company enjoys, even as it expects to report a net loss for the period with pressure on margins.
Following the announcement of results, the company's stock rallied about 5 percent in after-hours trade on the New York Stock Exchange.
Salesforce.com provides enterprise cloud computing applications such as customer and collaboration relationship management to businesses. It competes with bigger rivals such as Oracle Corp. and Sap AG. The company has been posting successive losses due to lower margins, while it has managed to report sturdy revenue growth.
During the quarter, the company's subscription and support revenues jumped 32 percent from last year, accounting for most of the business. Professional services and other revenues were up 31 percent.
The San Francisco, California-based company reported quarterly revenues of $834.7 million, compared with about $632 million last year. Analysts polled by Thomson Reuters expected revenues of $830.85 million for the quarter.
Total expenses for the quarter increased to $672 million from $502 million a year ago, and included $108 million in stock-based compensation expense, as well as higher spend on research and marketing.
As a result, Salesforce.com reported a quarterly net loss of $20.8 million or $0.14 per share, compared with net loss of $4 million or $0.03 per share a year ago.
Excluding items, adjusted earnings for the quarter were $77.7 million or $0.51 per share, compared with $61.6 million or $0.43 per share in the prior year.
On average, 41 analysts polled by Thomson Reuters expected earnings of $0.40 per share for the quarter. Analysts' estimates typically exclude special items.
As of January 2013, the company had deferred revenue of $1.86 billion, up 35 percent from a year ago
For the first quarter, the company expects a net loss of $0.44 to $0.42 per share, adjusted earnings of $0.40 to $0.42 per share, and revenues of $882 million to $887 million. Analysts currently estimate earnings of $0.42 per share on revenues of $885.98 million.
Net loss guidance includes an expected impact of about $0.71 per share related to stock-based compensation expense.
For fiscal year 2014, the company estimates a net loss of $1.22 to $1.18 per share, and adjusted earnings of $1.93 to $1.97 per share. Revenues are expected in the range of $3.82 billion to $3.87 billion, up from prior guidance of $3.80 billion to $3.85 billion.
Analysts currently expect earnings of $1.95 per share on revenues of $3.85 billion for 2014.
Guidance for the full year reflects an expected impact of $3.13 per share related to stock-based expense.
Salesforce.com closed Thursday at $169.22, up 1.37%, on a volume of 3.6 million shares on the NYSE. In after hours, the stock gained $8.18 or 4.83%. In the past year, the stock traded in a range of $120.18 to 178.91.
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