The cautious outlook overshadowed Salesforce's strong second-quarter results, causing the company's stock to drop 9 percent in after-hours trading.
Salesforce said it expects to earn 34 cents or 35 cents a share for the fiscal year ending Jan. 31, excluding the costs of an acquisition it announced earlier Wednesday.
Through the first half of the year, Salesforce had earned 16 cents per share.
Analysts, on average, had forecast full-year earnings of 35 cents a share — a figure that didn't factor in Salesforce's $31.5 million acquisition of customer call center specialist InStranet.
Salesforce expects the costs of the InStranet deal to shave 5 cents from its earnings, leaving its reported results for the full year at 29 cents or 30 cents per share.
Management projected full-year revenue of $1.07 billion to $1.075 billion, in line with analyst estimates, according to Thomson Reuters.
If Salesforce hits that target, it will market the first time it has produced $1 billion in annual revenue in its nine-year history. Through the first half of the fiscal year, Salesforce booked $511 million in revenue.
Investors evidently had much higher hopes for the company. Salesforce shares fell $6.09 in Wednesday's extended trading after finishing the regular session at $65.30. The stock has ranged from a low of $38.84 and a high of $75.21 during the past year.
Run by former Oracle Corp. executive Marc Benioff, Salesforce has been at the forefront of a technological evolution that is steering more companies away from buying prepackaged software and then paying high-priced consultants to install and maintain the programs on a hodgepodge of computers.
Salesforce instead sells monthly subscriptions that allow employees to call up the company's customer management programs on any computer with an Internet connection. The concept, often called "software as a service" or "cloud computing," is supposed to provide easier access and greater flexibility while holding down costs.
The formula paid off for Salesforce in the second quarter as it signed up 4,100 more customers and its profit more than doubled to $10 million.
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