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Published: February 28, 2024 at 4:16 PM ET
Salesforce Inc. stock initially fell 4% in after-hours trading Wednesday after the company posted sales and profits that beat analysts’ expectations. We also provided an update on the recently released Einstein Artificial Intelligence Platform and its cost reduction efforts.
The company also announced a 40 cent dividend and a $10 billion share buyback program. However, the weak sales outlook for fiscal 2025 is putting pressure on Salesforce stock.
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Salesforce Inc. stock initially fell 4% in after-hours trading Wednesday after the company posted sales and profits that beat analysts’ expectations. We also provided an update on the recently released Einstein Artificial Intelligence Platform and its cost reduction efforts.
The company also announced a 40 cent dividend and a $10 billion share buyback program. However, the weak sales outlook for fiscal 2025 is putting pressure on Salesforce stock.
“We are excited to begin paying our first dividend in Salesforce history and increase our stock repurchase plan by $10 billion,” Salesforce CEO Marc Benioff said in a statement announcing the company’s earnings.
cloud-based software company
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Net income for the fiscal fourth quarter, a key barometer of corporate software spending, was reported at $1.45 billion, or $1.47 per share. This compared with a net loss of $98 million, or 10 cents per share, in the year-ago period. Adjusted earnings were $2.29 per share.
Sales increased 11% to $9.29 billion from $8.4 billion in the same period last year.
Analysts surveyed by FactSet had expected net income of $2.27 per share and revenue of $9.2 billion, on average.
Salesforce provided full-year 2025 sales guidance of $37.7 billion to $38 billion, falling short of FactSet’s forecast of $38.65 billion.
Analysts were cautiously optimistic heading into the quarterly report. Jefferies’ Brent Till predicted that while public sector demand remains strong, “demand will improve modestly” as manufacturing and high-tech industries recover.
“The market wants meaningful customer adoption. [Salesforce’s] gen-AI Tools and I look forward to Salesforce providing updates on its progress while remaining focused on operational efficiency and tight control over workforce management as costs are closely monitored.” Futurum Group CEO Daniel Newman said in an email. .
Salesforce stock has soared 79% in the past 12 months, almost to an all-time high, while the S&P 500 index SPX is up 28%.
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