Stocks rose Wednesday, continuing yesterday’s rally on hopes that the Federal Reserve could lower interest rates later this year. The Dow Jones Industrial Average (DJINDICES: ^DJI) and the S&P 500 (SNPINDEX: ^GSPC) both added about 0.8%.
As for individual stocks, salesforce.com (NYSE: CRM) reported strong revenue gains, and Campbell Soup (NYSE: CPB) beat expectations for its latest quarter.
Salesforce extends its winning streak
Cloud software vendor Salesforce reported strong revenue and cash flow growth in its fiscal first quarter and raised its outlook for the year, inspiring investors to boost the stock 5.1%. Revenue grew 24% to $3.74 billion, exceeding the top end of its guidance and analyst expectations of $3.68 billion. Non-GAAP earnings per share excluding paper gains on investments came in at $0.66, compared with the analyst consensus of $0.61.
Revenue gains were broad-based across the company’s businesses, with subscription and support revenue from sales cloud growing 11% to $1.1 billion and service cloud revenue up 20% to $1 billion. Platform sales, including the effect of the MuleSoft acquisition, increased 46% to $800 million, while marketing cloud and commerce cloud revenue jumped 33% to $600 million. Operating cash flow grew 34% to $1.97 billion. The company increased guidance for full-year revenue growth by a percentage point to 21%-22%.
Salesforce is riding a global wave of digital transformation, and on the conference call the company highlighted its integration of artificial intelligence and blockchain capabilities into its offerings and its Trailhead workforce development product.
Investors warm to Campbell Soup
Shares of Campbell Soup gained 10% after the company served up fiscal third-quarter results that beat expectations and raised its profit guidance for the year. Net sales increased 16% to $2.39 billion and adjusted earnings per share fell 20% to $0.56. Analysts were expecting the company to earn $0.47 per share on sales of $2.36 billion.
Campbell’s sales growth resulted from its acquisition of Snyder’s-Lance; on an organic basis, revenue was flat from the period a year ago. Organic sales of the company’s meals and beverages unit were flat, with in-market consumption of soup falling 2.6%, an improvement over the first half of the year. Global biscuits and snacks had an organic sales increase of 1%, with seven out of 10 core brands growing or holding market share. The company raised guidance for full-year EPS from $2.45-$2.53 to $2.50-$2.55.
Campbell will provide an update on its turnaround plan at its investor day next week, but for now, investors seemed satisfied that declines in soup sales are stabilizing while snack foods are gaining ground on competitors.