Shares of cloud computing company Salesforce (NYSE:CRM) are slumping despite the company posting a strong beat on its fourth-quarter earnings.
Shares of Salesforce fell as much as 4% after the company issued earnings that exceeded analysts’ estimates. However, Salesforce came up short on its full-year earnings forecast for 2021, which disappointed investors.
Salesforce is also in the process of acquiring team communication app Slack in a $27-billion U.S. transaction. Salesforce expects to close the deal late in the quarter that ends on July 31.
Salesforce’s fourth-quarter earnings came in at $1.04 a share compared to 75 cents per share expected by analysts. Quarterly revenue was $5.82 billion versus $5.68 billion expected by analysts. The company also reported 20% year-over-year revenue growth in the fourth quarter.
While revenue guidance for the year ahead surpassed estimates, earnings guidance was generally soft. For the full year, which would include the impact of the Slack acquisition, the company called for $3.39 to $3.41 in adjusted earnings per share on $25.65 billion to $25.75 billion in revenue.
That forward guidance includes $600 million in revenue from Slack (Separately, Slack said this week that its preliminary revenue for the year that ended on January 31 was $902.6 million U.S., up 43% from a year earlier).
In the fourth quarter, Salesforce generated $1.36 billion U.S. in subscription and support revenue from its key Sales Cloud product for tracking sales leads, translating into roughly 11% annualized growth, compared with 12% in the prior quarter.
Acquisitions have helped Salesforce grow in recent years, and the Tableau data visualization software Salesforce bought in 2019 contributed to Salesforce’s $1.81 billion in subscription and support revenue during the quarter.
