Shares in salesforce.com, inc. (NYSE:CRM) released its earnings report for the first three months for 2013 earlier today, Friday May 24. The company showed earnings of 10 cents per share for the first three months of the year, on revenue of $893 million. The company’s shares have dumped more than 8 percent at time of writing, to stand at$41.97.
In a report concerning the earnings, Wedbush Research downgraded salesforce.com, inc. (NYSE:CRM) prospects to Neutral, and lowered that company’s price target to $42, down from $51 in the firm’s previous report on the company. The report has some interesting insights on the company.
The biggest difficulty for the company has been the weakness of the enterprise market. Though Salesforce is an imporant spend for enterprise units, there is growing pressure on enterprise expenditure for information technology. This pressure affects salesforce.com, inc. (NYSE:CRM) directly.
There are other factors contributing to the slowdown in the company’s business according to the report, however. The company has slowed its hiring of sales personnel. That means the firm may not be able to bring in as much new business in the future, and explains some of the loss in faith for the company.
The Salesforce report downgrades the firm’s outlook on EPS and revenue for future quarters. Wedbush analysts think that salesforce.com, inc. (NYSE:CRM) is likely to earn 48 cents per share in 2014. The company itself gave guidance of 47-49 cents per share in this morning’s earnings report.
Revenue, according to the report, will likely come in at $3,882 million, while salesforce.com, inc. (NYSE:CRM) expects to bring in $3.835B – $3.875B, which is above the forecast it gave in its last report.
salesforce.com, inc. (NYSE:CRM) has been the target of shorts from some value investors for quite a while. Investors argue that the company inflates its earnings by concentrating by non-GAAP numbers. The investors say that the company’s large loss in GAAP earnings is an important indicator of the firm’s future.
Those investors will surely be happy after the loss in the company’s value today. The massive drop on Friday’s market wiped out almost all of, and possibly more than, the firm’s gains for the entire year so far. salesforce.com, inc. (NYSE:CRM) closed 2012 at just above $42 per share, and now it’s trading just below that number.