D.A. Davidson Attributes Salesforce Billings Miss To Currency Headwinds

Shares of Salesforce.com, inc. (NYSE: CRM) fell more than 6 percent as investors were disappointed with the below-than-expected billings growth for the second quarter as well as third quarter guidance miss.

Jack Andrews of D.A. Davidson reiterated his Neutral rating and $86 target, and attributed the billings miss to softness in US and currency headwinds.

Quarterly billings of $1.853 billion came in below the StreetAccount consensus of $1.890 billion, despite rising 14.9 percent yaer-over-year. Similarly, deferred revenue grew 29 percent year-over-year to $3.82 billion (exceeding guidance of +26 percent-28 percent), but also below the StreetAccount consensus of $3.88 billion.

The company's third guidance calls for revenue of $2.110-$2.120 billion, non-GAAP EPS of $0.20-$0.21, and deferred revenue growth of 20 percent. Street consensus estimate for EPS/revenue stands at $0.24/$2.12 billion.

For the year, revenue is projected to be $8.275-$8.325 billion (+24-25 percent year-over-year), up from the previous guide of $8.260-$8.320 billion. Non-GAAP EPS guidance remained unchanged at $0.93-$0.95. Wall Street, on average, expects earnings of $0.95 a share on revenue of $8.31 billion.

Meanwhile, Salesforce recorded a top and bottom line beat for its second quarter. The company reported revenue of $2.037 billion, exceeding brokerage's $2.030 billion estimate, consensus of $2.020 billion, and guidance of $2.005-$2.025 billion. Non-GAAP EPS was $0.24, compared to brokerage's Street-matching estimate of $0.22, and guidance calling for $0.21 - $0.22.

At time of writing, shares of Salesforce fell 6.27 percent to $74.44.