The acquisition of MuleSoft earlier this year was a move that will help Salesforce expand its cloud integration platform
Also, the existing cloud partnerships with Amazon (AMZN) and Alphabet (GOOG) will expedite expansion in the overseas market, which has been a key revenue driver in recent times. However, foreign exchange related headwinds will continue to weigh down on the international operations, like in the past.
Having surpassed Wall Street estimates in all of the four trailing quarters, the company is likely to sustain the positive trend this time too. There is no doubt the management’s ongoing efforts to tackle competition and drive growth through product innovation, aggressive promotional campaigns and broadening the partner network are paying off.
In the second quarter, adjusted earnings nearly doubled to $0.71 per share, owing to a 27% annual growth in revenues, with all the key business segments registering double-digit growth. While reporting the previous results, the company had issued a lower-than-expected earnings outlook for the third quarter.
When Oracle reported its first-quarter results in September, the market was disappointed with the lackluster performance of its cloud segment that resulted in weak top-line growth. However, earnings rose sharply and topped estimates. It was a different story at Microsoft, which posted record first-quarter results on the strength of the cloud business.
The ascent and decline of Salesforce shares in recent months have been in line with the general trend in the tech sector. After reaching a peak in September, the stock entered a downward spiral. It traded lower during Friday’s regular session after closing the previous session up 2%.