Salesforce.com (CRM), one of the leading business software giants, reported strong earnings for the second quarter and raised its guidance for the full year. The stock jumped in after-hours trading, signaling a possible breakout above its 50-day line. Salesforce was among the top earnings movers on Wednesday, along with other software makers such as CrowdStrike (CRWD), Okta (OKTA), and Veeva Systems (VEEV). Meanwhile, Dow Jones futures rose slightly, along with S&P 500 futures and Nasdaq futures, ahead of the release of the PCE inflation report, the Fed’s preferred measure of price changes.
Salesforce Beats Q2 Estimates, Raises Guidance
Salesforce, a Dow Jones component, reported adjusted earnings of $1.48 per share on revenue of $6.34 billion for the second quarter, beating Wall Street estimates of $0.92 per share on revenue of $6.24 billion. The company also raised its full-year revenue guidance to a range of $26.2 billion to $26.3 billion, up from its previous range of $25.9 billion to $26 billion.
Salesforce CEO Marc Benioff said in a statement that the company had “the best quarter in our company’s history” and that it was “on track to become the fastest enterprise software company to reach $50 billion in revenue.” He also highlighted the company’s recent acquisitions of Slack and Tableau, which he said would help customers “accelerate their digital transformations.”
Salesforce stock rose 2.4% to $220.50 in extended trading, after closing up 1.45% to $215.04 on Wednesday. The stock is forming a cup base with a buy point of $238.22, according to IBD MarketSmith chart analysis. A decisive move above its 50-day line, which is currently at $217.65, could offer an early entry.
Other Software Stocks Report Earnings
Salesforce was not the only software stock that reported earnings on Wednesday. Several other cloud-based software companies also delivered strong results, showing that the demand for digital solutions remains high amid the ongoing pandemic.
CrowdStrike, a cybersecurity firm that provides cloud-based endpoint protection and threat intelligence, reported adjusted earnings of $0.11 per share on revenue of $337.7 million for its fiscal second quarter, beating analysts’ expectations of $0.09 per share on revenue of $323.4 million. The company also raised its full-year revenue guidance to a range of $1.39 billion to $1.41 billion, up from its previous range of $1.35 billion to $1.37 billion.
CrowdStrike stock rose 1% to $261 in after-hours trading, after closing down 0.9% to $258.41 on Wednesday. The stock is trading above its 50-day line and is approaching a buy point of $266 from a flat base.
Okta, a provider of identity and access management solutions for cloud applications, reported an adjusted loss of $0.11 per share on revenue of $316 million for its fiscal second quarter, beating analysts’ estimates of a loss of $0.35 per share on revenue of $296 million. The company also raised its full-year revenue guidance to a range of $1.24 billion to $1.25 billion, up from its previous range of $1.21 billion to $1.22 billion.
Okta stock soared 15% to $280 in extended trading, after closing up 0.4% to $243.49 on Wednesday. The stock is forming a cup base with a buy point of $294.72.
Veeva Systems, a provider of cloud-based software for the life sciences industry, reported adjusted earnings of $0.94 per share on revenue of $455 million for its fiscal second quarter, beating analysts’ projections of $0.78 per share on revenue of $436 million. The company also raised its full-year revenue guidance to a range of $1.83 billion to $1.84 billion, up from its previous range of $1.78 billion to $1.79 billion.
Veeva stock rose 3% to $313 in after-hours trading, after closing down 0.8% to $303.69 on Wednesday. The stock is trading near its all-time high and is extended from a buy point of $287 from a flat base.
Dow Jones Futures Rise Ahead Of PCE Inflation Report
Dow Jones futures rose 0.2% vs. fair value, along with S&P 500 futures and Nasdaq futures. The PCE inflation report will likely swing Dow futures and Treasury yields before the open.
The Commerce Department will release the July PCE price index, the Fed’s favorite inflation gauge, at 8:30 a.m. ET Thursday. Economists expect the Personal Consumption Expenditures price index and the core PCE to rise a modest 0.2% vs. June. The overall PCE inflation rate is seen climbing to 3.3% from June’s 3%, due to tougher year-earlier comparisons. The core PCE inflation rate should tick up to 4.2%.
Fed chief Jerome Powell has said he’s following a supercore inflation reading in the report: services prices excluding energy and housing.
Also at 8:30 a.m. ET, the Labor Department will release weekly jobless claims data. That comes ahead of the September jobs report on Friday. It follows the surprisingly weak job openings data on Tuesday and Wednesday’s soft ADP Employment Report.
The stock market rally rose slightly Wednesday following Tuesday’s follow-through day that confirmed the new uptrend. A softer-than-expected ADP Employment Report followed Tuesday’s surprisingly weak job openings data.
Four “Magnificent Seven” stocks, Tesla (TSLA), Amazon.com (AMZN), Meta Platforms (FB) and Apple (AAPL) are all trading near the 50-day line that could offer entries. Meta stock is on IBD Leaderboard.