Check the article link below for a Salesforce.com reality check
Maybe Salesforce will keep soaring. And let's assume the company's products really are as good as they say. But when you look closer, there are plenty of reasons for investors to be nervous.
First, the costs. This is so often a problem for fast-growing companies, and Wall Street too often turns a blind eye until it is too late. Is it happening again?
Salesforce's sales grew 29% last quarter, but its total operating expenses soared 40% to $365 million. As a result it actually booked a loss – of $391,000 – from operations. Even for the full year, sales rose 28% but costs rose faster, with the result that operating income actually fell by 15%. The company made a mere $97 million at the operating level out of $1.55 billion in sales.
Post a Comment