salesforce.com Beats on EPS but GAAP Results Lag

salesforce.com (NYSE: CRM  ) reported earnings on Feb. 23. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Jan. 31 (Q4), Salesforce beat slightly on revenue and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue increased significantly and GAAP earnings per share dropped to a loss.

Margins shrank across the board.

Revenue details
Salesforce logged revenue of $631.9 million. The 35 analysts polled by S&P Capital IQ expected to see net sales of $624.1 million on the same basis. GAAP reported sales were 38% higher than the prior-year quarter's $456.9 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $0.43. The 39 earnings estimates compiled by S&P Capital IQ anticipated $0.40 per share on the same basis. GAAP EPS were -$0.03 for Q4 compared to $0.07 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 78.4%, 140 basis points worse than the prior-year quarter. Operating margin was -1.0%, 90 basis points worse than the prior-year quarter. Net margin was -0.6%, 300 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $664.1 million. On the bottom line, the average EPS estimate is $0.36.

Next year's average estimate for revenue is $2.91 billion. The average EPS estimate is $1.65.

Investor sentiment
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Salesforce is outperform, with an average price target of $144.99.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of Salesforce.com. Motley Fool newsletter services have also recommended shorting Salesforce.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On February 26, 2012, at 12:56 AM, lowmaple wrote:

    so from a P E of 8000 or so down to 99. No wonder the stock went up. Puts anyone?

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