Salesforce (CRM - Free Report) shares recovered from a post-earnings after-hours slump to briefly touch a new all-time high on Wednesday morning, signaling that investors quickly changed their minds on the cloud computing giant’s second-quarter results.
After the closing bell on Tuesday, Salesforce released its second-quarter fiscal 2018 earnings report. The San Francisco-based software company reported profits of 33 cents per share, beating the Zacks Consensus Estimate of 31 cents. Total revenues of $2.56 billion were also ahead of our consensus estimate and climbed 26% year-over-year.
“We had a phenomenal quarter of growth, reaching a huge milestone for the company, becoming the first enterprise cloud software company to break the $10 billion revenue run rate,” said CEO Marc Benioff (also read: 3 Marc Benioff Quotes Every Tech Investor Needs to See).
Interestingly, shares of Salesforce dipped more than 2.6% in after-hours trading shortly after the release of the report. However, the stock recovered on Wednesday morning, moving more than 1.8% higher to touch a new all-time high of $94.63 per share.
With shares already hovering near these new highs prior to the report, perhaps investors were initially expecting an even stronger earnings beat, but Salesforce’s results were impressive nonetheless. On top of its solid earnings and revenue figures, the company said that cash generated from operations was up nearly 32%.
Salesforce also posted encouraging guidance. The cloud giant now expects third-quarter revenue in the range of $2.64 billion to $2.65 billion, an increase of 23% to 24% year-over-year. This is also ahead of our pre-earnings consensus estimate, which stood at $2.61 billion (also read: Salesforce Posts Earnings and Revenue Beats, Solid Guidance).
Salesforce has now climbed more than 33% year-to-date, outpacing its Computer – Software industry’s average gain of 14%. The stock is currently a Zacks Rank #3 (Hold) and sports an “A” grade for Growth in our Style Scores system.
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