RealTime IT News

Salesforce Beats the Street, Raises Estimates

Salesforce.com easily hurdled analysts' estimates in its second quarter Wednesday, posting a profit of $3.7 million, or 3 cents a share, on sales of $176.5 million.

It also boosted its fiscal 2008 sales and earnings-per-share estimates to between $727 million and $732 million and 8 cents to 10 cents a share, respectively.

Analysts surveyed by Thomson Financial expected the San Francisco-based company to earn a penny a share on sales of roughly $174 million in the quarter.

"Our business is firing on all cylinders," CEO Marc Benioff said during a conference call with analysts. "The second quarter closes an incredible first half for Salesforce.com."

In the second quarter, Benioff said Salesforce.com  reeled in a "large international financial services company with 35,000 users" and continues to take customers away from competitors with its platform-as-a-service model.

He said the company would announce the identity of this blue-chip customer in September, possibly just ahead of Dreamforce '07, the company's annual user and developer conference scheduled to begin Sept. 16 in San Francisco.

The platform-as-a-service component allows subscribers to build applications internally or purchase them from AppExchange, the company's on-demand application sharing service and deploy them elsewhere throughout their organization.

Benioff spent a good portion of the call discussing how his company continues to take away new and existing customers from competitors SAP , Oracle  and Microsoft .

At one point, while rattling off a list of new customers added in the quarter, he misspoke and said "SAP" rather than S&P, the abbreviation for Standard and Poor's, the credit rating and investment research firm.

"We're happy to take SAP too if they need us," he said after correcting himself.

In the second quarter, Salesforce.com added 3,000 new paying customers, a single-quarter record, bringing its total number of subscribers to an all-time high of more than 800,000.

Benioff pointed out that the $319 million in sales recorded in the first two quarter this year exceeded the $309.8 million in sales it posted in all of fiscal 2007.

Salesforce.com shares closed up 81 cents to $42.80 ahead of the earnings report and moved up 45 cents to $43.25 in after-hours trading.