NetSuite Q2 Earnings Sweet for Investors

Posted Aug 9th 2010 12:20PM by Tom Taulli
Filed under: Earnings Reports, Technology

No doubt, the dominant player in cloud-computing is Salesforce.com (CRM). And investors have certainly benefited nicely. But what are some other plays in the sector? If cloud-computing is a growing industry, other operators should benefit as well, right?

Definitely. And it looks like one is NetSuite (N), which develops an enterprise resource planning platform (this manages payroll, inventory, HR and so on). In fact, it is the only type of its kind that has massive scale. And, as seen by its latest earnings report, NetSuite is certainly gaining momentum.

In Q2, revenue increased 17% to $47.1 million, which was above the consensus forecast of $45.3 million. Adjusted earnings were $1.9 million or $0.03 per share. The Wall Street estimate was for $0.01 per share.

A key to success has been the OneWorld system, which is for larger companies and provides much more analytical capabilities. The upshot is that NetSuite can get higher fees. For example, NetSuite recently implemented OneWorld for CA Technologies (CA). With it, the company will be able to better manage its global ecommerce platform.

And yes, NetSuite expects its overall growth to ramp up. That is, the company raised its full-year guidance. The company forecasts earnings of $0.11 to $0.12 per share, up from its prior outlook of $0.06 to $0.08 per share.

Tom Taulli is also the author of several books, including the Complete M&A Handbook and also develops iPhone apps for finance.

Tags: CA, cloud-computing, CRM, featured, inthenews, NetSuite, NetSuite earnings, Salesforce.com