Shares still down

Salesforce (CRM) reported record revenues, beating analysts' forecasts, but gave a worse-than-Wall Street earnings outlook. The company has appointed Bret Taylor as co-CEO, who is seen as the future successor to current CEO Marc Benioff.

Salesforce (CRM) shares, up 28% YTD, fell 6% in after-hours trading on the back of the company's Q3 fiscal 2022 financial report, which ended 31 December. 2022, which ended on 31 October.

The big announcement was the appointment of Bret Taylor as co-CEO with current CEO Marc Benioff.

Taylor has played a central role in Salesforce's most important product developments over the past few years: the development of Customer 360, Hyperforce, and also oversaw Salesforce's largest ever acquisition of Slack.

Salesforce Q3 report

Salesforce's earnings per share fell 27% from a year ago to $1.27.

Total revenues rose 27% to a record $6.86 billion, also above Wall Street expectations of $6.8 billion.

Salesforce forecasts

Salesforce management expects revenues to rise to $7.22 billion to $7.23 billion in the fourth fiscal quarter, above the company's previous forecast and in line with analysts' forecasts of $7.22 billion.

However, Salesforce's earnings per share forecast for the December quarter suggests a drop to $0.72 $0.73, below analysts' average expectations of $0.81.

For Q1 fiscal 2023, Salesforce is forecasting revenues of $7.215 billion to $7.25 billion, indicating slower growth, and below the Wall Street forecast of $7.35 billion. In fiscal 2023, Salesforce expects revenue of $31.7 billion to $31.8 billion, up 20% from the projected numbers for fiscal 2022 and in line with analysts' perceptions.

Analysts' view

Analysts noted that Salesforce's weak projections could be related to management's concerns about the impact of the new strain and rising COVID-19 incidence on customers' willingness to pay for new projects.

Commenting on Salesforce's financial report in August, CEO Marc Benioff said the company had "never seen better results or more momentum" than during the pandemic, with the COVID Delta strain set to "only accelerate" Salesforce's business.

However, analysts believe Salesforce continues to face stiff competition from major rivals, including Microsoft's Azure (MSFT), Amazon Web Services from Amazon (AMZN) and Alphabet's Google Cloud (GOOGL, GOOG).