By Jon Swartz
ServiceNow Inc. stock fell 7%. in extended trading Wednesday after the software company reported fiscal second-quarter earnings that fell short of Wall Street analysts’ forecasts.
ServiceNow (NOW) reported earnings of $20 million, or 10 cents a share, compared with earnings of $59 million, or 30 cents a share, last quarter. Adjusted earnings were $1.62 per share.
Revenue rose 30% to $1.75 billion from $1.4 billion a year earlier.
Analysts polled by FactSet expected, on average, earnings of $1.55 per share on revenue of $1.76 billion.
“We remain very confident that our customers need us more than ever, given the macro [-economic climate],” ServiceNow Chief Executive Bill McDermott told MarketWatch, reiterating that the company expects to reach $11 billion in revenue by 2024. “We continue to hire and double-down on our talent brand and on -hire.”
Shares of ServiceNow have fallen 31% this year. The broader S&P 500 index (NOW) fell 15.5%.
“After Bill McDermott fired off a bit of a warning that raised long-term concerns about the company’s prospects, ServiceNow delivered a more positive quarter that saw the company take a beating on the bottom line,” said Daniel Newman, chief analyst. on Futurum, on MarketWatch.
Earlier this month, the company’s stock fell 12% following an interview in which McDermott, warned of serious macro headwinds.
“You’re at 41-year-high inflation. The dollar is now the highest it’s been in over two decades. We’ve got interest rates going up. People are worried about security. You’ve got war in Europe . So, the mood is not great,” McDermott said in a “Mad Money” segment on CNBC that aired after the markets closed on July 11. “You can see the dollar’s headwind today against the major technology brands. Nobody can outrun the money today.”
McDermott’s comments were made on the state of the tech sector, and not specifically about ServiceNow, the company said.
“No company is in a better position to help customers transform through the current macro environment than ServiceNow,” a company spokesperson said in a statement to MarketWatch. “Overall, demand for digital technology remains robust. Our customers recognize economic challenges but continue to indicate significant growth in IT spending.”
– Jon Swartz
(END) Dow Jones Newswires
07-28-22 0819ET
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