Salesforce Inc has raised its profit forecast for the full year, and stated that it did not expect any significant material impact from the uncertain prevailing economic environment. Shares for the company traded approximately 8 percent higher in extended trading.
In a statement, the company announced that despite record inflation and waning consumer demand, there was strong demand for its products and services from companies aiming to improve efficiency and incorporate contemporary work-flows that included hybrid work.
Amid investor movement away from growth stocks, the shares of the San Francisco based company rose by 7.7 percent to close at USD172.50. This came after the shares had plunged by 37 percent earlier this year following inflation in the US and the ongoing Ukraine crisis.
Salesforce rivals Oracle Corp and Microsoft Corp have also forecast a positive year, although shares of the companies have plummeted between 18 percent and 19 percent this year.
Analyst from SMBC Nikko Securities, Stephen Koenig said that despite the possibility of geopolitical or macroeconomic headwinds, Salesforce was well centred to capitalise on enterprise spending for digital transformation. He also said that the company had a resilient model in place.
The company has raised its adjusted profit estimate for the financial year ending January 2023, from an earlier forecast of USD4.63 per share to USD4.75 per share.
Arjun Bhatia, analyst at William Blair & Company, said that in the current market environment, the profit forecast raise was a plus, since it is a key area of investor focus.
Earlier, however, the company had to marginally lower its revenue forecast for the year to between USD31.7 billion and USD31.8 billion from an earlier forecast of between USD32 billion and USD32.1 billion.
Salesforce revenue rose by 24 percent to USD7.41 billion from a year earlier, for the first quarter ending April 30. This was above an earlier analysts estimate of USD7.38 billion.
Net income of the company fell to USD28 million from USD469 million.
Salesforce is the world’s leading customer relationship management (CRM) platform. The company assists clients marketing, sales, commerce, service and IT teams to seamlessly work as one from anywhere.
Salesforce unites marketing, sales, commerce, service, and IT teams from anywhere with Customer 360 – an integrated CRM platform that powers its entire suite of connected apps.