Salesforce shares dip on cautious outlook
Published: 22 Aug 2008 08:31 BST
Shares of software-as-a-service company Salesforce.com fell on Thursday in morning trading after the company announced cautious guidance for the upcoming third quarter.
Shares were trading at $55.80 (£29.73) by midday, down from Wednesday's close of $65.30.
Looking ahead, the company said it expects revenue in the third quarter to be between $273m and $274m, slightly below analysts' expectations.
On Thursday, Piper Jaffray downgraded the stock from 'buy' to 'neutral'.
The stock slip came despite a strong second quarter. Salesforce announced revenue of $263.1m for the second quarter ended 31 July, up 49 percent year-over-year, and up six percent from the most recent quarter. Revenue from subscriptions hit $239.7m, up from $160m in the year-ago quarter, while services revenue rose to $23.4m from $16.6m in the year-ago quarter.
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Net income for the quarter was $10m, or eight cents per share, up from $3.7m, or three cents per share, in the previous year.
On Wednesday, Salesforce announced it was acquiring InStranet, a Chicago-based maker of call-centre software, for around $31.5m. Salesforce plans to use InStranet's technology both internally, and as a new software-as-a-service offering expected to launch within 18 months.
Credit: Salesforce.com shares drop on outlook from CNET News
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