Salesforce, Workday earnings — What to know in markets Tuesday

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Two software companies are gearing up to release quarterly results after the bell Tuesday — Salesforce.com (CRM) and Workday (WDAY).

Given the backdrop of geopolitical unrest around the world, Salesforce’s third-quarter financial results will peel back the curtain on global IT spending. Revenue for Salesforce is expected to have been boosted by its recent acquisitions of MuleSoft and Tableau. Though analysts predict that margins are not likely to have expanded as a result of those acquisitions. In its largest deal ever, Salesforce bought Tableau for $15.3 billion in August.

Salesforce’s third quarter follows its strong second quarter results in which the company beat expectations on both the top and bottom lines. Sales Cloud and Service Cloud, Salesforce’s largest and second-largest businesses respectively, will be closely watched metrics among investors and analysts. Sales Cloud revenue jumped 13% to $1.13 billion during Q2, and Service Cloud revenue grew 22% to $1.09 billion.

Analysts are expecting Salesforce to report third-quarter adjusted revenue of 66 cents per share on $4.52 billion in revenue. The options market is implying a 3.9% move in either direction following the announcement.

Shares of the software company have jumped 17% this year and have lagged the S&P 500’s (^GSPC) 26% gain in the same time period.

Workday Inc. Chairman, Co-Founder and Co-CEO Aneel Bhusri (center R) and Co-Founder and Co-CEO Dave Duffield (center L) ring the opening bell with company executives in celebration of the company’s IPO at the New York Stock Exchange, October 12, 2012. REUTERS/Brendan McDermid (UNITED STATES – Tags: BUSINESS)

Market watchers will also be paying close attention to Workday after the closing bell. Workday’s cloud HR suite and financial management suite are two businesses investors will be monitoring. Analysts expect that the cloud HR suite sales growth will likely have slowed during the third quarter, while the newer financial management suite’s adoption is likely to have held steady.

Investors will be looking for commentary from management on overall IT spending and how recent investments in product development and sales have impacted margins.

Workday is expected to report third-quarter adjusted earnings of 37 cents per share on $920.82 million in revenue. The options market is implying a 5.6% move in either direction for the stock following the earnings report.

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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