Wednesday, November 9, 2011

SalesForce.com to Announce Earnings on Thursday, November 17 (Charts) *Financial Performance Review* CRM

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SalesForce.com (CRM) will report FY Q3 2012, the 3 months ended October 2011, financial results on Thursday, 11-17-11


SalesForce.com (CRM) to Announce Earnings

SalesForce.com will report FY Q3 2012, the 3 months ended October 2011, financial results on Thursday, November 17, after market close. The conference call will be at 5:00 p.m. ET.

SalesForce.com financial performance charts for prior quarters have been posted on the SalesForce.com Financial Performance page and will be updated for this next quarterly report. The charts are also lower in this post.

SalesForce.com Future and Past Financial Performance

Earnings per Share (Non-GAAP)
Yahoo Finance Analysts Estimates: $0.31 avg, $0.29 low, $0.37 high, 40 analysts
Prior Quarter: $0.30
Prior Year: $0.32
SalesForce.com Outlook: $0.30 - $0.31

Earnings per Share (GAAP)
Yahoo Finance Analysts Estimates: No estimate provided
Prior Quarter: -$0.03
Prior Year: $0.11
SalesForce.com Outlook: -$0.05 to -$0.06

Total Revenues (GAAP)
Yahoo Finance Analysts Estimates: $571.36M avg, $552.71M low, $589.90M high, 38 analysts
Prior Quarter: $546.00M
Prior Year: $429.09M
SalesForce.com Outlook: $568M to $570M

Prior FY Q2 2012 Financial Results (GAAP)
When SalesForce.com reports FY Q3 2012, the 3 months ended October 2011, financial results on November 17, SalesForce.com is expected to meet, beat, or miss various prior QoQ and YoY results. These financial results are charted on the SalesForce.com Financial Performance page and lower in this post. These prior quarterly financial results were:
GAAP
Total Revenues $546.00M
Operating Loss -$15.75M
Net Loss -$4.27M
Loss per Share -$0.03
Cash Flow per Share $0.61
Gross Profit Margin 77.86%
Operating Income Margin -2.88%
Net Income Margin -0.78%

Summary (GAAP)
This isn't good. Overall, FY Q3 2012, the 3 months ended October 2011, is expected to deteriorate further, compared to prior quarter FY Q2 2012 and prior year FY Q3 2011 financial results. For FY Q3 2012, SalesForce.com is expected to miss QoQ and YoY for Operating Loss, Net Loss, Loss per Share. SalesForce.com should beat on Total Revenues QoQ and YoY. Cash Flow per Share may meet QoQ and should beat YoY. SalesForce.com should meet or be close on Gross Margin or this will signal an additional uncertainty and deterioration. Operating Loss Margin and Net Loss Margin should deteriorate further due to an increase both Operating Loss and Net Loss. The detailed quarter by quarter charts are on the SalesForce.com Financial Performance page and also post below.

1 - All financial data below is GAAP, which results in a lower financial performance.
2 - SalesForce.com also reports Non-GAAP, which results in a higher earnings per share.
3 - Non-GAAP does not include stock-based compensation expense, amortization of purchased intangibles, non-cash interest expense related to convertible senior notes, and the related tax consequences. 

SalesForce.com (CRM) Reports Quarterly GAAP Net Loss: Loss per Share -$0.03

SalesForce.com (CRM) Summary Fiscal Q2 (GAAP) GAAP financial performance continues deteriorating. Revenues continue increasing as return on assets decrease. A current quarterly GAAP net loss and 3 consecutive quarterly GAAP operating losses have been reported. Cash flow per share was a 3-quarter low of $0.61. The 3 most recent quarters have been not only been unimpressive, but are now of concern. The poor financial performance is now beginning to affect financial position by draining liquidity. Financial position overall remains adequate, but unless financial performance can be improved will deteriorate further. CRM trades at 187 price/earnings ratio, but fundamentals have not been a hindrance to this high flying stock. The stock price is priced for a stellar future performance that does not appear to be on the horizon. Of even more concern is CEO Marc Benioff not commenting on financial performance this quarter in the press release but instead pumping the annual Dreamforce meeting and wanting us all to be there. CEO Benioff is whistling past the graveyard...

SalesForce.com (CRM) Income Statement Fiscal Q2 (GAAP) SalesForce.com (CRM) reported total revenues of $546.0M, a net operating loss of -$15.7M, and loss per share of -$0.03. From the prior fiscal quarter Q1 2012, total revenues were up +8.26%, net income down -905.28%, and earnings per share down -300.00%. From the prior year fiscal quarter Q2 2011, these were up +38.45%, down -125.74%, and down -127.27%, respectively. Gross, operating, and net margins were all down, to 77.86%, -2.88%, and 0.78%, respectively. Cash flow from operations was down QoQ to $0.61 per share and a 3-quarter low. The operating expense ratio (operating expenses divided by total revenues) of 80.74% is extremely high.

SalesForce.com (CRM) Balance Sheet Fiscal Q2 (GAAP) SalesForce.com's (CRM) total assets increased +9% QoQ to a record $3.42B from the prior quarter of $3.13B. The capital to assets ratio (total stockholders' equity divided by total assets) is a reasonable 41.45%, exclusive of "temporary capital" of $90.8M. The current ratio (current assets divided by total assets) is a fairly liquid 32.58%, decreasing, and does not include $709M in noncurrent marketable securities. SalesForce.com (CRM) is liquid with reasonable capital. The return on assets peaked in QE October 2009 at 5.13% and has declined for 7 consecutive quarters the current, extremely weak 0.98%. The $1.29B+ in cash, cash equivalents, and marketable securities (current and noncurrent), which are 37.6% of the total assets of $3.42B, is decreasing as operating losses and now a net loss create depletion.

SalesForce.com (CRM) Financial Performance by the Quarters (Charts)

SalesForce.com (CRM) Earnings Per Share Below is a chart of quarterly earnings per share. Earnings per share have ranged between -$0.03 and +$0.17 for the past 17 quarters and remained below +$0.18 for all the quarters reviewed. Current Loss per Share of -$0.03 is at the lowest to-date and a multi-year low. The chart average EPS, since QE July 2007, is +$0.09.


SalesForce.com (CRM) Cash Flow per Share Below is a chart of cash flow from operations per share. Cash flow per share has been volatile ranging from $0.14 to $1.18. Current Cash Flow per Share of $0.61 is  average and a 3-quarter low. The chart average CFS, since QE July 2007, is $0.61.


SalesForce.com (CRM) Total Revenues, Operating Income, and Net Income Below is a chart of quarterly total revenues, operating income, and net income. Current Total Revenues of $546.0M are yet another record and have consistently grown. Guidance indicates even higher total revenues in the future. The chart average TR, since QE July 2009, is $412.0M. Current Operating Loss of -$15.8M is the 3rd consecutive GAAP operating loss reported, preceded by -$2.8M for QE April 2011 and -$391K for QE January 2011. These operating losses were after the QE October 2010 record operating income of $35.2M. The chart average OI, since QE July 2009, is $18.2M. Current Net Loss of $4.3M is the first net loss reported on the chart and a multi-year low. The QE January 2010 net income of $22.4M is the all-time high. The chart average OI, since QE July 2009, is $14.6M. 


SalesForce.com (CRM) Gross Margin, Operating Margin, and Net Margin Below is a chart of quarterly gross margin, operating margin, and net margin. Current Gross Margin of 77.86% is a multi-year low and continues a downtrend. The chart average GM, since QE July 2009, is 80.06%. Current Operating Margin of -2.88% has been negative for 3 consecutive quarters, and is below the peaks of 9%+ in 2009. The chart average OM, since QE July 2009, is 5.18%. Current Net Margin of -0.78% a multi-year low and well below the peaks of 2009. The chart average NM, since QE July 2009, is 4.01%.


SalesForce.com (CRM) Return on Assets Below is a chart of annual return on average assets per quarter. The total net income for the most recent 4 quarters is divided into average assets for the most recent 4 quarters to obtain a rolling annualized ROA, an annualized return on average assets for the 12 months (4 quarters) ended. SalesForce.com has a historically low ROA for a technology company and doesn't appear to have an effective deployment of assets. The ROA peaked in QE October 2009 at 5.13% and has declined each quarter since, for 7 consecutive quarters, to the current Return on Assets of a extremely weak 0.98%. The $1.29B+ in cash, cash equivalents, and marketable securities, which are 37.6% of the total assets of $3.42B is pulling down the ROA. The excess liquidity now decreasing due to net losses. The chart average ROA, since QE April 2008, is 3.66%.


SalesForce.com (CRM) Growth Rates Below is a chart of the quarterly (QoQ, Q/Q, quarterly change) growth rates for revenues and earnings per share. Total Revenues Growth of +8.26% QoQ continues the uptrend and has increased in every quarter on the chart, ranging from +3.65% to +14.16%. Earnings per Share Growth QoQ has deteriorated into a downtrend decreased for 3 consecutive quarters.


SalesForce.com (CRM) Revenue Sources Below is a chart of quarterly revenue sources, as a percentage of total revenues. Subscription and Support continues as the primary source of revenues and is currently 93.27% of total revenues, which is about the chart average, since QE July 2009, of 93.29%. Professional Services and Other is currently at 6.73%, which is about the chart average, since QE July 2009, of 6.71%.



SalesForce.com (CRM) Geographic Revenues Below is a chart of quarterly geographic revenues, as a percentage of total revenues. For the current quarter, Americas revenues were $367M and 67% of total revenues. Europe was $102M and 19%, and Asia Pacific was $77M and 14%. The overall trend is a decrease in Americas, Europe mostly flat, and an increase in Asia Pacific.



SalesForce.com (CRM) Operating Expense Ratio Below is a chart of quarterly operating expense ratio, which is operating expenses divided by total revenues. The current Operating Expense Ratio of 80.74% is probably a company record high - and is way too high - and continues a 4-quarter uptrend. This indicates a decreased efficiency plus a lower proportion of revenues is reaching the bottom line, net income, and ultimately earnings per share.



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