NEW YORK (AP) - Shares of business software provider Salesforce.com jumped Friday after the company’s second-quarter results came in ahead of Wall Street forecasts and it raised its full-year outlook.
THE SPARK: Though a rise in costs put a dent in second-quarter earnings, the company’s adjusted profit of 29 cents per share beat the average estimate from analysts by two cents, according to Thomson Reuters.
Revenue rose 25 percent to $394.4 million, also topping analysts’ $384.8 million forecast.
Salesforce also lifted its full-year revenue forecast to roughly $1.6 billion, up from a prior outlook of $1.55 billion to $1.56 billion and well above analysts’ $1.57 billion estimate.
THE BIG PICTURE: While the overall economy has offered mixed signals lately, many tech companies are reporting a rebound in corporate technology spending. More companies are looking to save money by signing up for cloud computing services like those offered by Salesforce.com, in which the company hosts client software on its servers and makes it accessible over the Web. That saves companies from having to invest in major server equipment and individual hard drives themselves.
THE ANALYSIS: In a note to investors, Caris & Co. analyst Curtis Shauger said he expects Salesforce.com shares to continue marching higher, raising his price target to $120 from $115.
He said the company has “one of, if not the most, powerful” growth trajectories in the technology industry.
SHARE ACTION: Salesforce.com shares rose $12.71, or 13.2 percent, to $109.12.
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