Shares of Salesforce increased in value on Tuesday on strong third quarter results.
The cloud computing company has shown a better result, higher than estimates. The earnings reported were 61 cents a share. It was far better than analyst’s expectation, which was stated at 50 cents.
Similarly, revenue was at $3.39 billion, for the third quarter, while analysts expected revenues at $3.37 billion, according to Refinitiv.
With good expansion strategies, its revenues have seen an increase of 26 percent.
Towards close on Tuesday, the share prices were up by 7.4 percent as they were quoted at $137 on good results.
Salesforce has shown a 25 percent increase in its year-on-year unearned revenue. The third quarter revenue is up by 26 percent on a year-on-year comparison.
Salesforce has been growing continuously with good revenues in the Service Cloud and Sales Cloud sectors. The company has been growing by 20 percent per annum as many companies are opting for cloud services and moving away from traditional software.
Research and development expenses have seen a 22 percent increase, which is $481 million for this quarter alone. Sales and marketing expenses have also seen a rise of 36 percent, which is an increase of $1.59 billion.
Salesforce has ‘made one of the best deals by acquiring MuleSoft for a cost of $6.5 billion. The company has plans for international expansion to offset any weakness in the demand environment in the U.S.
The Chairman and Co-Chief Executive of Salesforce, Marc Benioff says that there is no immediate fear of any recession or downturn in the economy of the country. Speaking at the conference call on Tuesday, he says that there are much growth and investment in the economy for the coming year and a good economic environment will benefit the company’s performance for the year.
Out of 42 analysts, 38 of them have overweight, while 4 have hold ratings for Salesforce.