2 Sends the Bears Packing

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Fellow Fool Anders Bylund nailed it when he predicted that battleground stock (NYSE: CRM  ) would beat estimates again. Without further ado, let's break down the digits.

Fourth-quarter revenue jumped 38% to $632 million -- a solid beat relative to the $623 million revenue consensus. By the time you get to the bottom line, you may encounter a familiar feeling, with the non-GAAP earnings per share of $0.43 also putting the $0.40 Street estimate to rest. Meanwhile, operating cash flow rose 45% to $240 million.

For the full year, revenue increased 37% to $2.27 billion, with non-GAAP earnings of $1.36 per share.

Salesforce's revenue pipeline keeps on growing, with its deferred revenue balance jumping 48% to $1.38 billion. The current portion of deferred revenue increased by 41%, which was boosted by longer invoice durations, so part of that bump is strictly related to a change in invoice terms. Unbilled deferred revenue put up an encouraging gain of 47% to $2.2 billion.

Those solid digits are contributing to some upbeat guidance figures. First-quarter revenue is forecasted in the range of $673 million to $678 million, ahead of the $663 million that the Street was looking for next quarter. On the other hand, the non-GAAP earnings-per-share guidance of between $0.33 and $0.34 is a hair shy of $0.36 that analysts are calling for.

Full-year 2013 sales guidance has now been cranked up from previous figures to a new range of between $2.92 billion and $2.95 billion, with the bottom line expected to be between $1.58 and $1.62 per share.

CEO Marc Benioff chalked up the guidance bump to "strong customer response" to the company's social-enterprise moves. This quarter is a stark contrast to the last report, when shares plunged as billings growth disappointed. It also differs from larger rival Oracle's (Nasdaq: ORCL  ) most recent report, which sent shivers through IT investors' bones.

Oracle and SAP (NYSE: SAP  ) have been snapping up cloud-software makers in the meantime, but I wouldn't expect any bids for any time soon, considering its nearly $20 billion market cap and nearly five-digit P/E. The good news is that is doing just fine on its own.

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Fool contributor Evan Niu holds no position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Oracle. Motley Fool newsletter services have recommended both buying shares of and shorting Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.

Read/Post Comments (4) | Recommend This Article (2)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 25, 2012, at 5:22 PM, voxraison wrote:

    billings growth, ex the invoice duration change was 31%. As per the CFO. This is a deceleration. Why dont you read the entire transcript before mouthing off...

  • Report this Comment On February 25, 2012, at 11:07 PM, MyDogRufus wrote:

    " ... nearly five-digit P/E. The good news is that is doing just fine on its own."

    Wow! Sounds great!

  • Report this Comment On February 25, 2012, at 11:32 PM, constructive wrote:

    CRM's non-GAAP earnings are a joke and not representative of reality in any way.

  • Report this Comment On February 26, 2012, at 4:26 PM, Medicalrecordman wrote:

    Bears sent packing ? Huh ?? If anything, Bears are licking their chops. CRM just said their Q1 EPS would be 10% light of analysts expectations and their fiscal 2013 EPS guidance is at the lower end of analysts expectations. Oh, need I mention that this year's EPS growth rate is slowing from 30% to 17% ? That big time slowing growth rate is supposed to make me want to buy the stock with a forward P/E over 90 ? LOL. Sorry, but the declining EPS growth rate is MILES out of whack in relation to the P/E and at some point the stock price will pay a hefty price for this discrepancy. Kool-aid doesn't last forever ... just ask shareholders in NFLX & AMZN how their multiples have held up lately.

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