Salesforce.com rises on 1Q results and higher forecast

Shares of Salesforce.com Inc. rose Thursday after the customer management technology company posted fiscal first-quarter results exceeding analyst expectations, and raised its outlook for the year.

The San Francisco-based company reported its fiscal first-quarter results late Wednesday. Profit increased 13 percent, and both net income and revenue exceeded expectations due to growth in subscription support sales. For the fiscal second quarter, the company forecast greater sales than analysts had expected.

Salesforce.com also raised its profit and revenue estimates for the fiscal year ending in January.

In morning trading, the stock rose $2.87, or 4.6 percent, to $65.63.

Jefferies analyst Ross MacMillan upgraded the stock to "Buy" from "Hold" and raised his price target to $77 per share from $49 on the news. He said the company is moving into the infrastructure market, which is much larger than the market for its customer relationship applications.

Citi Investment Research analyst Brent Thill kept a "Buy" rating on the stock, saying investors have started to sell Salesforce.com shares because sales growth usually slows down in the July quarter. But he said the seasonal shifts are decreasing, and the recent slip in the stock price presents a buying opportunity.

Thill said the company has maintained strong business momentum, and revenue continues to grow. He raised his target price to $80 per share from $70, and increased his profit and revenue estimates.

(This version CORRECTS the story to note that Jefferies, not Citi, upgraded the stock.)