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Salesforce co-CEO Keith Block downplays profit forecastguidance cut: 'Business looks strong'

Key Points
  • Salesforce co-CEO Keith Block says the enterprise software company is still in a strong position, despite a light earnings-per-share guidance for the current quarter.
  • "Our business looks strong in the fourth quarter. It looks good for next year," Block tells Jim Cramer.
  • Salesforce on Tuesday reports a revenue and profit beat.
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'Business looks strong'—Salesforce co-CEO Keith Block downplays EPS guidance cut

Salesforce co-CEO Keith Block told CNBC's Jim Cramer on Tuesday that the company's earnings-per-share guidance cut is not a major concern.

Shares of the business software provider closed around $161, but fell around 2% in extended trading after it issued a per-share earnings guidance of $.54 to $.55 for the current quarter, which ends in January. Analysts had estimated $.61 per share.

"We had a great quarter. We have a lot of success," Block said on "Mad Money." "Our business looks strong in the fourth quarter, it looks good for next year, and we're in a great position to advise these customers."

For Salesforce's fiscal third quarter, it reported a per-share earnings of $.75, excluding certain items, compared with $.66 as expected by Refinitiv. Its revenues were $4.5 billion, compared with $4.45 billion, as expected by Refinitiv.

Cramer asked Block if there was "any delta, actuality, in this quarter that made it so you guided down the next quarter from what you were supposed to."

Block, who was appointed co-CEO with Marc Benioff in August 2018, responded, "We've got a very strong track record. We're the fastest-growing enterprise software company at our size and scale."

Cramer later said his focus on the slightly light guidance was because he didn't want to mislead viewers.

Block also noted that Salesforce now expects revenue of $16.99 billion to $17 billion, compared with the $16.9 billion average analyst estimate, according to Refinitiv.

Additionally, he reiterated the call made at last month's Dreamforce conference by Chief Financial Officer Mark Hawkins, who said Salesforce will double in size by fiscal 2024, reaching revenue that year of $34 billion to $35 billion.

"There is a lot of great opportunity. Digital transformation is everywhere," Block said, "and that's why companies are coming to us as their trusted advisor, and it's a very exciting time to be in the market."

Salesforce shares have climbed 18% this year, but they've underperformed the S&P 500, which has gained 23%, and have returned far less than smaller cloud companies such as ServiceNow, Shopify and Veeva.

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Salesforce co-chief downplays profit forecast cut: 'Business looks strong'

CNBC's Ari Levy contributed to this report.

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