Salesforce Q3 profit beats forecast

Cloud software developer Salesforce's third quarter profit surpassed analysts' forecasts for the fourth consecutive quarter. Buoyed with robust web-based sales and marketing software, Salesforce has increased its forecast for yearly revenues.

Salesforece registered an encouraging growth in operating margins.

The growing demand for cloud software is boosting the revenues for Salesforce. The Sanfrancisco-based Salesforce is the world's largest maker of online sales software has increased revenue forecast for full year.

Salesforce has reported 13.3 percent in operating margins for the third quarter as against previous growth of 11.3 percent in the previous corresponding quarter.

Salesforce is providing its cloud-based services online without any need of software installation in personal computers (PCs). The cloud business rose 38 percent and marketing cloud expanded by 29 percent.

Revenues were up 23.7 percent to $1.71 billion during the third quarter as against the average forecast of $1.70billion.

Salesforce has increased revenues forecast for the full year ending January 2016 to the range of $6.64 billion-$6.65 billion from $6.60 billion -$6.63billion. The company has managed to reduce net loss to $25.2 million or four cents per share from $38.9 million or six cents per share.

Salesforce's stock rose over six percent to $81.40 after the announcement of quarterly results. The share price was up 30 percent so far this year. Shebly Seyrafi, an analyst at FBN Securities, said: "The upside potential is huge. What we are finally seeing after many years is some reasonable operating margin expansion."

Salesforece's unbilled deferred revenues rose 24 percent to $6.7 billion. The unbilled deferred revenues are crucial, not recorded in the balance sheet, as it's a measure of contracts closed with business customers.

Salesforce's customer relationship management software enables companies to organize and track sales calls and leads. The cloud software maker is gaining market share for its products from all the global markets. The successful response for this software is helping Salesforce gain market share from Oracle Corp and SAP.

Marc Benioff, Chief Executive Officer, Salesforce, is keen on enhancing the cloud-based product range. As part of its business strategy, Salesforce is aiming to enhance spending of existing customers on new features being added to cloud-based products, while focusing on getting new customers.

Salesforce has developed new features exclusively customized for healthcare and financial services. It also equipped new machine-learning tools with its popular sales-focused software.

Salesforce has clinched deals from global majors such as General Motors (GM) and Anheuser-Busch InBev NV. Salesforce sees growing demand for cloud software from major companies. Salesforce is on buy rating by market analysts.