(Bloomberg) -- Salesforce.com Inc. forecast first-quarter revenue and profit that will exceed analysts’ projections, getting a lift as corporate customers shift more spending to cloud-based services.
Sales in the period that ends in April will be $1.885 billion to $1.895 billion, the San Francisco-based company said in a statement Wednesday. Analysts on average had estimated revenue of $1.86 billion, according to data complied by Bloomberg.
The company also topped sales predictions in the fiscal fourth quarter.
Chief Executive Officer Marc Benioff, a pioneer in the market for cloud computing, is investing in new products and acquisitions to fuel growth as Salesforce benefits from the growing interest among businesses to access software via the Internet rather than installing it on their own machines. Almost 60 percent of organizations are adopting cloud-based services beyond one or two small applications, according to IDC.
“Salesforce is the only enterprise software company of the cloud era who has critical mass -- and is not going away,” said John Rizzuto, an analyst at Suntrust Robinson Humphrey Inc. Salesforce shares rose about 8 percent in extended trading. They had declined less than 1 percent to $62.52 at the close in New York, leaving them down 20 percent this year. Software Concerns
The company’s shares took a hit earlier this month along with those of other software companies after Tableau, a maker of data-analysis and charting software, saw its value plummet by half in one day following results that fell short of some estimates. That raised concerns among investors that Salesforce -- which reached all-time highs in December -- could also stumble.
For the fourth quarter, which ended in January, profit before certain costs was 19 cents a share, matching analysts’ average projection. Sales in the quarter rose 25 percent to $1.81 billion, beating the estimate of $1.79 billion.
Unbilled deferred revenue, a closely watched number that indicates the amount of business booked but not yet recognized, increased 25 percent to $7.1 billion. First-quarter profit excluding certain items will be 23 cents to 24 cents a share, Salesforce said, compared with an average estimate of 21 cents.
Salesforce has been stepping up acquisitions to expand its reach into areas such as pricing and machine learning. In December, the company agreed to buy SteelBrick Inc., which helps companies manage price quotes for customers. Last week, Salesforce acquired startup PredictionIO, which assists software developers.
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