The Salesforce logo is displayed on a podium during the Dreamforce 2012 n San Francisco.
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Salesforce.com Inc. shares declined in the extended session Tuesday after the cloud-based customer relationship-management company said it would acquire Slack Technologies Inc. in a deal worth $27.7 billion and topped Wall Street estimates for the quarter.
Salesforce
CRM,
shares declined 3.6% after hours, following a 1.8% decline in the regular session to close at $241.35.
The company reported third-quarter net income of $1.08 billion, or $1.15 a share, versus a loss of $109 million, or 12 cents a share, in the year-ago period. Adjusted earnings were $1.74 a share, compared with 75 cents a share in the year-ago period. Revenue rose to $5.42 billion from $4.51 billion in the year-ago quarter.
Analysts surveyed by FactSet estimated earnings of 75 cents a share on revenue of $5.23 billion, based on Salesforce’s forecast of 73 cents to 74 cents a share on revenue of $5.24 billion to $5.25 billion back in August.
“We had another record quarter, and now we’re raising our FY21 revenue guidance to $21.11 billion at the high end and initiating FY22 guidance of $25.5 billion,” said Marc Benioff, Salesforce chairman and co-CEO, in a statement .
Salesforce expects adjusted fourth-quarter earnings of 73 cents to 74 cents a share on revenue of $5.67 billion to $5.68 billion, while analysts had forecast 86 cents a share on revenue of $5.51 billion.
The company also confirmed it would buy Slack
WORK,
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with shareholders receiving $26.79 in cash and 0.0776 shares of Salesforce common stock for each Slack share.
Last week, reports surfaced that Salesforce was in talks to buy Slack. Salesforce’s acquisition of the business-communications company, which went public in June 2019, is seen as a “major shot across the bow” at Microsoft Corp.
MSFT,
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which has its competing Teams direct messaging service and already competes with Salesforce with its Dynamics 365 CRM service.
Back in August, Salesforce’s second-quarter earnings and outlook triggered its biggest one-day stock gain ever with a 26% rally as quarterly revenue hurdled the $5 billion mark for the first time.
Slack shares rose 0.3% after hours, following a 2.2% rise in the regular session to close at $43.84. Slack’s stock is up 95% for the year.
Salesforce also said Chief Financial Officer Mark Hawkins would retire on Feb 1.
At Tuesday’s close, Salesforce’s stock was up 48% for the year, while the First Trust Cloud Computing ETF
SKYY,
is up 48%, the Dow Jones Industrial Average
DJIA,
is up 4.5%, the S&P 500 index
SPX,
is up 13%, and the tech-heavy Nasdaq Composite Index
COMP,
is up 38%.