Salesforce CEO Says Its Business Is Still In A Strong Position

Salesforce co-CEO, Keith Block told CNBC’s Jim Cramer on Tuesday that the company’s earnings-per-share guidance cut is not a major concern.

Shares of the business software provider closed around $161, but fell around 2% in extended trading after it issued a per-share earnings guidance of $0.54 to $0.55 for the current quarter, which ends in January. Analysts had estimated $0.61 per share.

“We had a great quarter. We have a lot of success,” Block said on “Mad Money.” “Our business looks strong in the fourth quarter, it looks good for next year, and we are in a great position to advise these customers.”

For Salesforce’s fiscal third quarter, it reported a per share earnings of $0.75, excluding certain items, compared with the $0.66 as expected by Refinitiv. Its revenues were $4.5 billion, compared with $4.45 billion, as expected by Refinitiv.

Cramer asked Block if there was “any delta, actuality, in this quarter that made it so you guided down the next quarter from what you were supposed to.”

Block, who was appointed co-CEO with Marc Benioff in August 2018, responded saying, “We’ve got a very strong track record. We are the fastest-growing enterprise software company at our size and scale.”

Cramer later said his focus on the slightly light guidance was because he didn’t want to mislead viewers.

Block also noted that Salesforce now expects revenue of $16.99 billion to $17 billion, compared with the $16.9 billion average analyst estimate, according to Refinitiv.

Additionally, he reiterated the call made at last month’s Dreamforce Conference by Chief Financial Officer Mark Hawkins, who said Salesforce will double in size by fiscal 2024, reaching revenue that year of $34 billion to $35 billion.

“There is a lot of great opportunities. Digital transformation is everywhere,” Block said, “and that’s why companies are coming to us as their trusted advisor, and it’s a very exciting time to be in the market.”

According to a report by CNBC, Salesforce shares have climbed 18% this year, but they’ve underperformed the S&P 500, which has gained 23%, and have returned far less than smaller cloud companies such as ServiceNow, Shopify and Veeva.