By Denny Jacob

 

Salesforce shares rose after the company reported a surge in third-quarter profit and projected earnings ahead of Wall Street estimates for the current quarter.

The stock rose 7.5% to $247.70 in after-hours trading after closing up 2.4% in the regular trading session. Shares had been up about 74% this year through the close, making it the best performing component of the Dow Jones Industrial Average.

Salesforce posted net income of $1.22 billion, or $1.25 a share, for the three months ended Oct. 31, up from $210 million, or 21 cents a share, a year earlier. Adjusted earnings were $2.11 a share, above analysts' estimates of $2.05 a share.

Revenue climbed to $8.72 billion from $7.84 billion. This matched the high end of Salesforce's prior guidance range.

The results show corporate technology spending remains steady despite ongoing inflation and higher interest rates. They also show that Salesforce's effort to cut costs and boost margins are bearing fruit.

The San Francisco-based company earlier this year laid off 10% of its workforce and restructured its sales team in an effort to reorient the business toward maximizing profits and away from a focus largely on top-line growth.

Salesforce forecast revenue between $9.18 billion and $9.23 billion as well as adjusted earnings of $2.25 a share to $2.26 a share for the fourth quarter. Analysts polled by FactSet expected revenue of $9.22 billion and adjusted earnings of $2.18 a share.

For fiscal 2024, Salesforce raised the low end of its prior revenue range. It also forecast adjusted earnings of $8.18 a share to $8.19 a share, above its prior outlook in the range of $8.04 a share to $8.06 a share.

 

Write to Denny Jacob at denny.jacob@wsj.com

 

(END) Dow Jones Newswires

November 29, 2023 17:24 ET (22:24 GMT)

Copyright (c) 2023 Dow Jones & Company, Inc.
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