Salesforce co-founder and co-CEO Marc Benioff told CNBC’s Jim Cramer on Tuesday that the rising value of the dollar played a role in the software company’s lower revenue forecast during its last trimestre.
“Our advice is really impacted by the currency,” Benioff said in an interview on “Mad Money.” “We’ve now had to consume about $600 million in currency swings…since we first gave guidance last November.”
“The [U.S] the dollar is getting stronger and stronger as an incredible safe haven. And while it’s great if all your income is in the United States, we have strong businesses internationally – we’re currently the third-largest software company in Japan,” he said, adding that he had “never seen anything like” the deceleration of the Japanese yen since March.
The dollar index, which compares the performance of the US currency against other major currencies including the euro and the yen, has risen more than 6% this year and hit its highest level in about 20 years this this month.
While a strong dollar can boost the performance of companies that rely heavily on business in the United States, it’s bad news for those that depend on businesses in Europe and Asia and see their profits shrink when sales abroad. foreign are converted into dollars.
“Although we had a great quarter, the US dollar, they had a much better quarter than us. I’ve never seen dollar strength like this,” Benioff said.
Salesforce beat Wall Street expectations for first-quarter revenue and profit after Tuesday’s bell. The company raised its earnings outlook but lowered its revenue forecast.
Disclosure: Cramer’s Charitable Trust owns shares of Salesforce.
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