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Bear of the Day

Salesforce.com Inc. (CRM - Analyst Report) reported fourth-quarter fiscal 2013 adjusted loss per share of 2 cents, narrower than the Zacks Consensus Estimate of 3 cents loss per share. Revenues Revenues in the quarter were $834.7 million, up 32.0% from the year-ago quarter. The quarter’s result was also above the company’s guidance range of $825.0 million to $830.0 million. Salesforce witnessed an improvement in revenues from all its business segments. Subscription and support revenue was $785.5 million, up 32.0% on a year-over-year basis, while the Professional services and other revenue was $49.2 million, up 31.0% year over year. Geographically, the company witnessed decent revenue growth in all of its operating regions. Revenue in the Americas was up 34.0% to $583.0 million, while Europe grew 37.0% to $149 million. This apart, revenue from Asia grew by 17.0% in dollars to $103 million. Although Asian revenue grew, but the growth has been affected by slowing demand from enterprise customers in Japan. Operating Results Gross profit expanded 31.4% year over year to $651.3 million. Gross margin was 78.0%, down 40 basis points from the year-ago quarter. Total operating expenses rose 33.9% year over year to $672.1 million on the back of a 50.3% rise in research and development expense (R&D), 33.0% increase in sales and marketing expense, and 23.0% rise in general and administrative expense. Continuous increase in headcount from the recent acquisitions drove the operating expenses higher. Operating loss of $20.8 million during the quarter was more than the year-ago quarter’s loss of $6.4 million. Operating loss margin was 2.5% versus 1.0% in the prior-year quarter. GAAP net loss in the quarter was $20.8 million or 14 cents per share compared with net loss of $4.1 million or 3 cents in the comparable quarter last year. Excluding special items but including stock-based compensation expense, adjusted net loss was 2 cents per share compared with a profit of 9 cents in the year-ago quarter.

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