Business software provider Salesforce.com Inc beat Wall Street expectations for the third quarter and maintained its earnings outlook for the rest of its fiscal year despite the uncertain economic outlook.
The company said it seemed to have weathered the effects of Superstorm Sandy and fears among its clients surrounding the fiscal cliff as it projected sales for the current quarter, ending Jan. 31, of between $825 million and $830 million, roughly in line with analysts' average forecast of $829.9 million.
The fiscal cliff refers to U.S. government spending cuts and tax rises due to be implemented under existing law in early 2013 that may cut the federal budget deficit but also tip the economy back into recession.
Shares rose 1.8 percent to $148.59 in extended trade.
In light of the macro environment and a pretty poor third-quarter for tech and software companies, investors have to be pleased, said Israel Hernandez, a managing director at MKM Partners. Salesforce is looking at momentum across its various businesses and feeling very good about the trajectory to guide the way they did.
Salesforce, which sells marketing and sales services to companies like Kimberly-Clark Corp and General Electric , has seen its shares soar 44 percent this year, although they have sagged in recent weeks, along with the wider Nasdaq index, on doubts whether businesses will pull back on information technology spending.
But analysts say CEO Marc Benioff appears to have buttressed his company's market position by expanding Salesforce's product offerings before the end of the year, when major companies typically renew their IT contracts.
Founded in 1999 as a sales management software provider, Salesforce now also offers human resource management tools. In recent months, Benioff has been aggressively acquiring companies and pitching a newly expanded suite of social media products, dubbed Social Enterprise, which, for example, lets companies track what customers are saying about them on Twitter and Facebook.
Benioff told analysts on a conference call on Tuesday that Radian6, a company acquired by Salesforce in 2011 for $326 million, will generate more than $100 million in revenue next year.
We've moved successfully from a single product company to a multi-product company,