CRM Stock Falls As Revenue Outlook Slashed Amid $10 Billion Buyback

Salesforce (CRM) on Wednesday reported July-quarter earnings that fell from a year earlier but topped Wall Street targets. The company lowered its fiscal 2023 revenue outlook while announcing its first-ever repurchase program of CRM stock.

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The enterprise software maker now puts its 2023 revenue outlook in a range of $30.9 billion to $31 billion, down from earlier guidance of $31.7 billion to $31.8 billion. In addition, Salesforce said its board of directors has approved a $10 billion buyback for CRM stock.

Including Slack Technologies, which it acquired in 2021, Salesforce earnings for the second quarter fell 19.6% to $1.19 a share on an adjusted basis. The San Francisco-based enterprise software maker said revenue climbed 22% to $7.72 billion.

A year earlier, Salesforce reported profit of $1.48 a share, including investment gains, on sales of $6.34 billion.

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CRM stock analysts expected Salesforce to report earnings of $1.03 a share on sales of $7.69 billion.

Reporting earnings after the market close, CRM stock fell 4.6% to 171.70 in extended trading on the stock market today.

CRM Stock: Guidance Misses Estimates

The enterprise software maker said current remaining performance obligations, known as CRPO bookings, rose 15% to $21.5 billion, in line with estimates. CRPO bookings are an aggregate of deferred revenue and order backlog.

For the current quarter ending in October, the company forecast earnings per share in a range of $1.20 to 1.21 vs. estimates of $1.28 a share for CRM stock. Also, the software maker expects revenue of $7.825 billion at the midpoint of guidance, vs. estimates of $8.07 billion. Salesforce projected third quarter CRPO growth of 12% vs. estimates of 16% growth.

Prior to Wednesday, CRM stock had retreated about 30% in 2022, as software growth stocks generally are struggling.

Salesforce sells software under a subscription model. Its software helps businesses organize and handle sales operations and customer relationships. The company has expanded into marketing, customer services and e-commerce.

Heading into the earnings report, CRM stock owned a Relative Strength Rating of 36 out of a best-possible 99, according to IBD Stock Check-up.

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Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.

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