(Reuters) — Salesforce.com on Thursday forecast full-year profit that was below market expectations, sending the shares of the online software company down 3.9% in extended trading.
The company’s latest and biggest acquisition of workspace messaging company Slack for a $ 27.7 billion deal in December is seen as expensive by any Wall Street analysts, even though there are long-term benefits.
“Weak FY22 EPS guidance suggests margin expansion is likely to be muted even adjusting for the acquisition of Slack,” Scott Berg, Needham & Co analyst, said.
The largest provider of customer relationship management software forecast full-year adjusted earnings per share between $ 3.39 and $ 3.41, below estimates of $ 3.49 per share.
While new emerging virus strains pose a new hurdle to business spending, Salesforce is also facing stiff competition from Microsoft, which is ramping up its cloud-based offerings.
Revenue in the quarter ended Jan. 31 rose to $ 5.82 billion from $ 4.85 billion a year earlier, driven by increased demand for its cloud-based software.
Analysts on average expected revenue to be $ 5.68 billion, according to IBES data from Refinitiv.
The company raised its fiscal 2022 revenue forecast slightly to between $ 25.65 billion and $ 25.75 billion, above analysts’ average estimate of $ 25.42 billion.
Excluding items, the company earned $ 1.04 per share, beating estimates of 75 cents.
(Reporting by Chavi Mehta in Bengaluru; Editing by Arun Koyyur)
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