Salesforce ( CRM Quick Quote CRM - Free Report) is scheduled to release first-quarter fiscal 2024 results on May 31.
For the fiscal first quarter, the company projects total revenues between $8.16 billion and $8.18 billion (midpoint $8.17 billion). Non-GAAP earnings are expected between $1.60 and $1.61 per share.
The Zacks Consensus Estimate for revenues is pegged at $8.17 billion, indicating an increase of 10.2% from the year-ago quarter’s reported figure. The consensus mark for earnings is pegged at $1.61 per share, implying a year-over-year increase of 64.3%.
Salesforce’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 15.6%.
Let’s see how things have shaped up before this announcement.
Factors to Consider
Salesforce’s first-quarter performance is likely to have gained from its focus on building and expanding relationships with leading brands across industries and geographies. Also, significant growth opportunities in the public sector are expected to have been a tailwind in the fiscal first quarter.
The company’s ability to offer integrated solutions for customers’ business problems is likely to have been a key growth driver. The firm’s products, like Trailhead and myTrailhead, are helping companies through their transformation processes and increasing business scale with modern technology.
Salesforce’s quarterly performance is likely to have benefited from the robust demand environment as customers are undergoing a major digital transformation. The customer relationship management software provider’s focus on introducing more aligned products per customer needs is expected to have boosted its top line in the quarter.
Also, the acquisitions of Slack, Mobify and Vlocity are anticipated to have aided CRM’s top line during the to-be-reported quarter. Growth across its four major cloud service offerings, Sales Cloud, Service Cloud, Platform, and Other and Marketing & Commerce Cloud, is anticipated to have boosted Salesforce’s subscriptions and supported its revenues.
However, a decline in software spending by small and medium businesses amid the macroeconomic uncertainty due to the pandemic and the ongoing Russia-Ukraine war might have affected Salesforce’s fiscal first-quarter performance. Further, stiff competition from Oracle and Microsoft is a concern, along with forex headwinds.
However, the ongoing restructuring initiative, which includes trimming the workforce, is likely to have boosted Salesforce’s profitability in the first quarter. Restructuring initiatives had benefited the company’s fourth-quarter fiscal 2023 non-GAAP earnings by 9 cents per share.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Salesforce this season. The combination of a positive
Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.
Salesforce currently carries a Zacks Rank #3 and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our
Earnings ESP Filter. Stocks With the Favorable Combination
Per our model,
HP Inc. ( HPQ Quick Quote HPQ - Free Report) , Zscaler ( ZS Quick Quote ZS - Free Report) and Jabil ( JBL Quick Quote JBL - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.
HP is set to report second-quarter fiscal 2023 results on May 30. The company has a Zacks Rank #3 and an Earnings ESP of +1.85% at present. HP’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 1.1%. You can see
. the complete list of today’s Zacks #1 Rank stocks here
The Zacks Consensus Estimate for HPQ’s second-quarter earnings is pegged at 76 cents per share, suggesting a decline of 29.6% from the year-ago quarter’s earnings of $1.11. HP’s quarterly revenues are estimated to decrease 20.7% year over year to $13.07 billion.
Zscaler carries a Zacks Rank #3 and has an Earnings ESP of +4.47%. The company is scheduled to report third-quarter fiscal 2023 results on Jun 1. Its earnings beat the Zacks Consensus Estimate in the preceding four quarters, with the average surprise being 29.7%.
The Zacks Consensus Estimate for Zscaler’s third-quarter earnings stands at 42 cents per share, implying a year-over-year increase of 147.1%. It is estimated to report revenues of $410.7 million, which suggests an increase of approximately 43.2% from the year-ago quarter.
Jabil carries a Zacks Rank #3 and has an Earnings ESP of +3.38%. The company is expected to report third-quarter fiscal 2023 results on Jun 15. Its earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 5.6%.
The Zacks Consensus Estimate for JBL’s third-quarter earnings is pegged at $1.90 per share, indicating a year-over-year increase of 10.5%. The consensus mark for revenues stands at $8.17 billion, suggesting a year-over-year drop of 1.9%.
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