Salesforce (NYSE: CRM) delivered strong sales and earnings in its fourth quarter Wednesday, posting a profit of $20.4 million, or $0.16 a share, on sales of $354 million.
A survey of analysts by Thomson Reuters pegged the Software-as-a-Service leader for a profit of $0.15 a share on sales of $342 million.
Salesforce shares closed up $1.20 a share, or 2 percent, to $69.44 ahead of the earnings report before moving up $0.22 to $69.70 in after-hours trading.
The $354 million in sales marks a 22 percent improvement from the year-ago quarter when the San Francisco-based company earned $13.8 million, or $0.11 a share, on sales of $289.6 million.
“As our full year results demonstrate, the movement to cloud computing is driving exceptional growth for Salesforce.com,” CEO Marc Benioff said in a statement. “Our sales cloud, service cloud and custom cloud businesses all delivered outstanding results.”
Last quarter, Salesforce also delivered better-than-expected sales and profits but watched investors sell-off the stock in the wake of the good news.
It could be a different story this time around, however, as Benioff told investors to expect better sales and earnings in the first quarter and for all of fiscal 2011.
Salesforce is now projecting a profit of between $0.29 and $0.30 a share, excluding one-time items and expenses, on sales of between $365 million and $367 million. It’s also forecasting full-year sales growth of between 16 percent and 17 percent and earnings between $1.25 a share and $1.27 a share.
Analysts were anticipating sales of roughly $355 million and earnings in the vicinity of $0.18 a share.
Salesforce said it added 4,600 new customers in the fourth quarter, bringing its total to 72,500—up 31 percent from the year-ago quarter.
It also exited the quarter with a backlog of more than $704 million in deferred revenue, an increase of 19 percent from the fourth quarter of 2009.
Competing with the likes of SAP (NYSE: SAP), Oracle (NASDAQ: ORCL), Microsoft (NASDAQ: MSFT) and NetSuite (NYSE: N), Salesforce has carved out a clear leadership position in the on-demand customer relationship management (CRM) application market.
With this week’s announcement that Chatter, its cloud-based, real-time collaboration service has entered beta testing with select customers, the company is taking its cloud strategy in a new direction to take on the likes of Microsoft’s SharePoint and IBM’s (NYSE: IBM) Lotus Notes offerings.
Salesforce shares peaked at a 52-week high of $75.53 after bottoming out at $25.44 last February.
Nineteen of the 34 analysts covering the stock maintain either a “buy” or “strong buy” recommendation while the remaining 15 analysts are rate it either a “hold” or “neutral.”
Larry Barrett is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.