Salesforce Inc. (NYSE:CRM) provided a sales outlook for the current quarter that fell short of expectations, sparking fears of a growth slowdown at the software giant. The shares dropped 14% in extended trading.
Revenue is projected to increase by about 8%, reaching up to $9.25 billion in the period ending in July, according to the San Francisco-based company’s statement on Wednesday. Analysts, on average, had estimated $9.35 billion, as compiled by Bloomberg. Profit, excluding some items, is expected to be around $2.35 per share, compared to the average estimate of $2.40.
Investors have been worried about Salesforce’s declining sales growth over the past year as the company shifted its focus to improving profitability. Management has highlighted the potential for artificial intelligence-oriented software and features to boost revenue. Additionally, Salesforce has increased buybacks and initiated a dividend to appease Wall Street.
The shares fell to a low of $231.02 in extended trading after closing at $271.62 in New York. Despite these challenges, the stock has gained just 3.2% this year, lagging behind other technology sector companies like Nvidia Corp. (NASDAQ:NVDA) and Dell Technologies Inc. (NYSE:DELL), which have seen significant rallies.
In the fiscal first quarter ending April 30, Salesforce reported an 11% increase in revenue, reaching $9.13 billion.
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