Salesforce (CRM) Stock Falls 10% as co-CEO Bret Taylor Resigns
Salesforce (NYSE:CRM) stock is trending and falling today after the company announced yesterday afternoon that co-CEO Bret Taylor is resigning. Additionally, the company reported stronger-than-expected results for its fiscal third quarter, although Q4 guidance came in below analysts’ average outlook.
After serving as co-CEO of Salesforce for a year, Taylor will step down from the role on Jan. 31. The executive came to Salesforce after the giant acquired his software firm in 2016. In a statement, Taylor indicated that he would look to launch another company, saying that he would go back to his “entrepreneurial roots.”
Marc Benioff, who is co-CEO alongside Taylor and helped start Salesforce back in 1999, will become the sole CEO of Salesforce on Jan. 31.
Wedbush analyst Daniel Ives says Wall Street will view Bret Taylor’s departure as “a shocker.” However, the analyst adds that “Benioff remains the core hearts and lungs of the Salesforce story.”
CRM Stock: Results and Guidance
Excluding certain items, Salesforce reported Q3 earnings per share of $1.40. That came in well above analysts’ average estimate of $1.22 per share. On the top line, the company’s sales jumped 14% year-over-year (YOY) to $7.84 billion as well. That’s also slightly higher than the $7.83 billion analysts had estimated.
With that said, the midpoint of Salesforce’s Q4 top-line guidance was $7.98 billion. This figure is slightly below analysts’ average estimate of $8.03 billion shown on Yahoo! Finance.
Benioff had the following to say on the Q3 earnings call:
“We closed some amazing deals in the quarter with great companies like Bank of America, RBC Wealth Management and Dell […] And even with purchase decisions receiving greater scrutiny, we continue to gain market share and close marquee transactions.”
On a cautionary note, Benioff also added that Salesforce has been “seeing a lot of buying behavior that really reflects a lot of what we’ve seen during other crisis, whether it’s 2008, 2009 or even 2001.”
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been PLUG, XOM and solar stocks. You can reach him on Stocktwits at @larryramer.
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