U.S. Stocks: Salesforce raises 2021 revenue forecast on remote work boost, shares jump

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August 26, 2020 11:14 AM

The COVID-19 pandemic, which has hastened the shift to remote work, is benefiting software providers.

 U.S. Stocks, Salesforce, online business software, employees, Dow Jones Industrial Average index, e-commerceSalesforce’s products have positioned the company to thrive in the current environment.

Reuters: Salesforce.com Inc on Tuesday raised its annual revenue forecast and beat estimates for quarterly results on coronavirus-spurred demand for its online business software that supports remote work and commerce, sending its shares up nearly 15%.

The COVID-19 pandemic, which has hastened the shift to remote work, is benefiting software providers as many companies have extended employees the option to work from home till the end of next year.

Salesforce, slated to join the Dow Jones Industrial Average index on Aug. 31, offers a range of digital products that help companies manage customer relationships, order management, e-commerce and marketing. Bret Taylor, president and chief operating officer of the company, said many of those technologies have seen increased use, such as tools that help companies quickly build out curbside pickup options for their commerce operations without requiring extensive computer coding.

“What it really differentiates Salesforce broadly is we have these low-code values, where you don’t need to be a professional developer to set up Salesforce,” Taylor told Reuters in an interview. “Right now, a week lost means you could be out of business.”

Salesforce’s products have positioned the company to thrive in the current environment and will continue to help Salesforce in adding large enterprise customers, Nucleus Research analyst Daniel Elman said.

Salesforce now expects revenue between $20.7 billion and $20.8 billion in the fiscal year 2021, up from its previous forecast of $20 billion.

Total revenue jumped about 29% to $5.15 billion in the second quarter from a year earlier, above analysts’ expectation of $4.90 billion, according to IBES data from Refinitiv.

Excluding items, the company earned a profit of $1.44 per share, which beat analysts’ average estimate of $0.67 per share.

Net income rose to $2.63 billion, or $2.85 per share, from $91 million, or $0.11 per share, a year earlier.

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