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.
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
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.
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
is up 48%, the Dow Jones Industrial Average
is up 4.5%, the S&P 500 index
is up 13%, and the tech-heavy Nasdaq Composite Index
is up 38%.