Biz Break: Salesforce’s forecast drops it from the cloud back to Earth

Top Of The Order:

From The Cloud To The Ground: Well, reported its quarterly results after the close of trading Wednesday and when you hang around in the cloud like the business-software company does, it can be so easy to fall back to Earth. Just like Salesforce did.

The good: Salesforce reported a fiscal second-quarter profit of 33 cents a share on revenue of $2.04 billion, compared to the same period a year ago, when Salesforce broke even on a per-share basis on revenue of $1.63 billion. Excluding one-time items, Salesforce earned 24 cents a share,  which topped the estimates of Wall Street analysts surveyed by Thomson Reuters, who expected Salesforce to earn 22 cents a share on $2.02 billion in sales.

All of Salesforce’s main business lines also grew over a year ago. And it was the first time Salesforce topped $2 billion in quarterly sales.

But, to borrow from “Monty Python’s Flying Circus”…And now for something completely different.

Salesforce’s shares tumbled by almost 9 percent in after-hours trading as the San Francisco company gave a third-quarter outlook that made investors wonder if its days of big growth are numbered. Salesforce said that for the period between August and September, it expects to earn 20 cents to 21 a share, on revenue in a range of  $2.11 billion to $2.12 billion. The problem with that was analysts had forecast Salesforce to earn 24 cents a share on $2.13 billion in sales.

Word is that there are concerns about the effect of Salesforce’s recent spate of acquisitions, and how such deals could impact the company’s earnings over the next few quarters. Those deals have included the $3 billion Salesforce spent in May to buy Demandware, a developer of e-commerce platforms, and Quip, a cloud-based startup that Salesforce acquired for $582 million in July.

So, if Salesforce wants to get its investors to lift its stock off the ground, it’s going to have to prove that there’s a payoff coming from all those deals.

Middle Innings:

Alba’s Planet: She’s been an actress, a mother and company founder. And, soon, Jessica Alba will be adding the title of ‘mentor’ to her resume.

Alba has signed up on the mentor path by joining “Planet of the Apps,” the upcoming unscripted TV series being produced by Apple and production company Propagate. The theory behind “Apps” is that the program will work with app developers to build, promote and market their products under the watch of Alba, and other mentors such as Gwyneth Paltrow, musician and entrepreneur and investor Gary Vaynerchuk.

Alba, is also going to serve as an executive producer on “Apps,” and the program is getting some heavy financial help to ensure that the apps that are developed on the show see the light of day: Silicon Valley venture capital firm Lightspeed Venture Partners is putting in $10 million to fund the show’s app-creation efforts. Lightspeed, which has also financed companies such as Snapchat and Google’s Nest, has also provided funding to Alba’s Honest Company, which is known for selling non-toxic baby products and other items.

Washed Away: Well, if you have a load of laundry sent off to get done by Washio, you best make sure all your clothes come back. The Santa Monica-based on-demand laundry service has done its last load.

Washio said late Monday that it was ceasing operations, and wouldn’t be taking any new orders. The company, which you could say was like a Uber of the laundry industry, let customers use an app to schedule pickups of their laundry, which Washio would then do and often return within 24 hours. Washio was said to have been reaching out to possible buyers, but faced with no takers, and a lack of business growth, decided it just couldn’t keep the washers and dryers running any longer.

Bottom Of The Lineup:

Here’s a look at how some leading Silicon Valley stocks Wednesday…

Movin’ On Up: Gains came from Veeva Systems, Infoblox, Intersil, Twitter and Nektar Therapeutics.

In The Red: Decliners included Palo Alto Networks, Gigamon, Synaptics, A10 Networks and Aviat Networks.

The tech-focused Nasdaq Composite Index gave up 0.2 percent to close at 5,213.22.

The blue chip Dow Jones Industrial Average slipped 0.3 percent to end the day at 18,400.88.

And the broad-based Standard & Poor’s 500 Index pulled back by 0.2 percent to finish at 2,170.95.

Quote Of The Day: “This is definitely one of the proudest moments in JetBlue’s history.” — JetBlue Chief Executive Robin Hayes. On Wednesday, JetBlue flew the first commercial flight from the U.S. to Cuba in more than 50 years.

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Photo: Chief Executive Marc Benioff delivering a speech at the 2014 DreamForce conference in San Francisco. On Wednesday, Salesforce reported upbeat second-quarter results, but its outlook sent the company’s shares into the red in after-hours trading. (Justin Sullivan/Getty Images)


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