Salesforce shares and forecasts

Salesforce shares fell despite a good quarterly report as Wall Street expected higher profits in the new year with the Slack acquisition.

Salesforce (CRM) shares, up 29.2% over the past 12 months, fell 3.9% on Thursday after the company released figures for the fourth quarter and full fiscal 2021 (ended 31 January 2021) and also gave a forecast for the first quarter and full fiscal 2022.

Salesforce reported fourth-quarter earnings per share growth of 58% to $1.04, up $0.29 from analysts' estimate of $0.75. Revenue rose 20% to $5.82 billion, also above the average analyst estimate of $5.68 billion. The growth rate was unchanged from Salesforce's previous quarter, while, some analysts had expected an increase.

Last quarter, Salesforce was highlighted by the release of Vaccine Cloud, a cloud-based tool that government agencies and companies can use to manage the process of vaccinating the public against COVID-19.

For the full 2021 fiscal, Salesforce revenue rose 24% to $21.3 billion. Free cash flow was $2.81 billion, which is good enough considering the company's significant acquisition spending.

Forecasts from the company

Salesforce's forecast for the first quarter of fi. 2022 was:

• EPS growth of around 25% to a range of $0.88 to $0.89, above analysts' expectations of $0.76.
• Earnings growth of about 20.6% to a range of $5.875 billion $5.885 billion.

At the same time, Salesforce's full-year earnings per share guidance for fiscal 2022 was worse than analyst expectations. 2022 was worse than analysts' expectations: $3.39 to $3.41 versus the Wall Street forecast of $3.49.

Salesforce's annual revenue forecast was between $25.65 billion and $25.75 billion, better than analysts' estimates of $25.41 billion.

Salesforce executives said the annual forecast figures include projected $600 million in revenue from Slack, whose $27 billion acquisition is expected to close in the second quarter of this fiscal year.

Salesforce shares have fallen 6.45% over the past week on news that the US Department of Justice has requested more information about the Slack acquisition deal. The department's antitrust division is currently reviewing the acquisition.