CRM Stock Falls As Revenue Outlook Slashed Amid $10 Billion Buyback


Sales team (CRM) lowered its fiscal 2023 revenue outlook for CRM stocks citing foreign exchange rates and slowing demand from retail and telecom customers.


Also at the end of Wednesday, Salesforce reported quarterly figures for July that fell from a year earlier, but surpassed Wall Street’s targets.

The enterprise software maker estimates its revenue forecast for 2023 in a range of $30.9 billion to $31 billion, down from previous expectations of $31.7 billion to $31.8 billion. During an earnings call with analysts, Salesforce management noted “a more measured buying environment in the second half of the July quarter, especially in North America and Europe,” Cowen analyst Derrick Wood said in a report.

Salesforce Stock: $10 Billion Buyback Set

He added: “This includes longer sales cycles, additional approval layers in purchase decisions and deal compression dynamics. This was seen more sharply in the retail/consumer goods, telecom/media verticals, while financial services, technology and energy were more resilient.”

In addition, Salesforce said the board of directors has approved a $10 billion buyback for CRM stock. It is the very first CRM stock buyback program.

Including Slack Technologies, which it acquired in 2021, Salesforce’s second-quarter earnings fell 19.6% to $1.19 per share on an adjusted basis. The San Francisco-based business software maker said revenue increased 22% to $7.72 billion.

A year earlier, Salesforce reported earnings of $1.48 a share, including capital gains, on revenue of $6.34 billion.

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Salesforce stock analysts expected Salesforce to report earnings of $1.03 per share on revenue of $7.69 billion.

CRM shares fell 6.4% to 168.50 in early trading in the stock market today.

CRM Inventory: Guidance Misses Estimates

The enterprise software maker said its current remaining performance commitments, known as CRPO postings, are up 15% to $21.5 billion, in line with estimates. CRPO postings are a total of deferred revenue and backlog.

For the current quarter ending October, the company forecasts earnings per share in the range of $1.20 to 1.21 versus estimates of $1.28 per share for CRM stock. The software maker also expects revenue of $7.825 billion at the middle of the guidance, versus estimates of $8.07 billion. Salesforce forecasted third-quarter CRPO growth of 12% versus estimates of 16% growth.

“Management has taken the lead in cutting CRPO growth to 12% versus street at 16% and revenue growth to 17% versus 20% earlier,” Jefferies analyst Brent Thill said in a report. “We believe this makes sense in an uncertain macro environment.”

Prior to Wednesday, CRM stocks were down about 30% in 2022 as software growth stocks generally struggle.

Salesforce sells software under a subscription model. The software helps companies organize and handle sales activities and customer relationships. The company has expanded into marketing, customer service and e-commerce.

Heading into the earnings report, CRM stock held a Relative Strength Rating of 36 out of the best 99 possible, according to IBD Stock Check-up.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.


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The Valley Voice
The Valley Voice
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.


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