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Tickers in this Article: CRM
When Salesforce.com (NYSE:CRM) releases its second quarter earnings on Thursday, August 23, 2012, analysts are expecting a 42.9% drop in earnings from a year ago. The consensus estimate is 4 cents per share, down from earnings of 7 cents per share a year ago.

Investors should care about a company's quarterly earnings because it shows the state of the business over the past 90 days and provides guidance for the following 90 days. SEE: 12 Things You Need To Know About Financial Statements

What to Expect: For the fiscal year, analysts are projecting earnings of 0 cents per share.

Salesforce.com is expected to report revenue of $728.3 million for the quarter, beating last year's figure of $546 million by 33.4%. Revenue for the fiscal year is expected to come in at $3.02 billion.

Company Performance: Revenue increases have been in the double digits for the past four quarters. It has risen by an average of 37.7%, with the biggest increase of 38.4% coming in the second quarter of the last fiscal year.

There are generally two price/earnings ratios calculated: the first, called the trailing Price/Earnings ratio, is calculated using the previous years actual earnings; the second, called forward Price/Earnings ratio, is calculated using the next year's estimated earnings. To determine the P/E ratio, an investor divides the market price of the stock by the earnings-per-share (EPS) of the stock. SEE: How To Use The P/E Ratio And PEG To Tell The Future Of A Stock

Since May 22, 2012, the stock price has dipped 1.5% to $147.23 from $149.45. July 19, 2012 to July 24, 2012 marked one of Salesforce.com's worst periods, as the share price fell $12.39.

The Competition: Salesforce.com is a cloud computing company, which provides customer relationship management (CRM) products to businesses. It offers a technology platform for Internet-based computing, storage, and connectivity solutions for customers and developers. Twenty-seven of 31 analysts give Salesforce.com a buy rating. They have grown pessimistic about the stock, as the number of buy ratings has dropped slightly over the past three months.

The company's closest competitor in the software and programming industry is Microsoft (MSFT). Analysts are more optimistic about Salesforce.com than about Microsoft. Only 20 out of 28 analysts rate the latter a buy.

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