Salesforce.com inc's Third Quarter Earnings Report

Salesforce.com inc (NYSE:CRM) announced its results for the third quarter on November 20, 2012. 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.

Investors care about earnings because they drive stock prices. Strong earnings generally result in the stock price moving up and vice versa. SEE: How To Decode A Company's Earnings Reports

The Numbers: Salesforce.com inc managed to exceed estimates with stronger-than-expected EPS and revenues. Revenue climbed 34.9% from the same period last year. Salesforce.com inc has averaged revenue growth of 36.3% over the past five quarters. Salesforce.com inc reported a net loss of $220.3 million during the third quarter.



Management Quote: "Salesforce.com is the first enterprise cloud computing company to exceed a $3 billion annual revenue run rate, with outstanding third quarter revenue growth at 35% in dollars and 37% in constant currency," said Marc Benioff, Chairman and CEO, salesforce.com. "Given the strong customer response to our next generation social and mobile cloud technologies, I'm delighted to announce that we expect to surpass a $4 billion annual revenue run rate during our fiscal year 2014."



A Look Back: Gross margin shrank 1.6 percentage points to 76.4%. The contraction appeared to be driven by increased costs, which rose 44.9% from the year earlier quarter while revenue rose 34.9%.



Looking Ahead: A decreasing earning estimate is a negative sign and usually leads to a drop in the stock price.