By Akash Sriram and Yuvraj Malik
(Reuters) -Salesforce Inc raised its full-year adjusted profit forecast and said it did not see any material impact from the uncertain broader economic environment, sending the enterprise software firm’s shares up about 8% in extended trading.
The company said on Tuesday there was strong demand for its software from companies looking to improve efficiencies and incorporate modern-day work-flows, including hybrid work, despite a four-decade high inflation and tapering consumer demand.
Shares of the San-Francisco-based company rose 7.7% to $172.50, after plummeting about 37% this year as investors moved out of growth stocks on a series of bad news including high inflation in the United States and the Ukraine crisis.
Shares of rivals Oracle Corp and Microsoft Corp, which have also forecast an upbeat year, have fallen between 18% and 19% this year.
“Macroeconomic or geopolitical headwinds may show up sooner or later, but Salesforce is well positioned to capitalize on enterprise spending on digital transformation, and the company has a fairly resilient model,” SMBC Nikko Securities analyst Steven Koenig said.
Salesforce increased its adjusted profit estimate for the fiscal year ending January 2023 to $4.75 per share from its prior forecast of $4.63.
The profit forecast raise is a big positive as it’s a key area of investor focus, especially in the current market environment, said William Blair & Company analyst Arjun Bhatia.
However, foreign exchange headwinds forced the company to marginally lower its revenue forecast for the year to $31.7 billion to $31.8 billion, from its earlier forecast of $32 billion to $32.1 billion.
Revenue in the first quarter ending April 30 rose 24% to $7.41 billion from a year earlier, above analysts’ average estimate of $7.38 billion, according to IBES data from Refinitiv.
Net income fell to $28 million from $469 million.
(Reporting by Akash Sriram and Yuvraj Malik in Bengaluru; Editing by Shinjini Ganguli)
