(CRM  ) shares were down 10% following the company's Q2 earnings report. The company exceeded analysts' expectations on the top and bottom line, but shares plunged as the company issued Q3 and full-year guidance that came in below expectations.

Overall, CRM shares have underperformed this year with a 36% YTD decline. However, the company has been more of a victim of adverse market conditions as its earnings and revenue growth have remained on track. This is resulting in much more favorable valuations as it has a forward P/E of 28.8 which is the cheapest level in company history. Another positive is that the company has $14 billion in cash.

Inside the Numbers

In Q2, Salesforce reported $1.19 per share in earnings which exceeded expectations of $1.02 per share. Revenue also topped expectations at $7.72 billion vs. $7.69 billion and was up 22% compared to last year's Q2.

The company also approved a $10 billion stock buyback for the first time in the company's history. In Q3, it sees earnings of $1.20 per share on $7.82 billion in revenue. This was below analysts' expectations of $1.29 per share in earnings and $8.1 billion in revenue. The company said some of the decreased guidance was due to the impact of a stronger dollar.

For the full year, it reduced its outlook to $4.71 per share from $4.75 per share in earnings. And, it trimmed its revenue outlook to $31 billion from its previous estimate of $31.8 billion. Both figures were below analysts' expectations of $4.75 per share in full-year EPS and $31.7 billion in revenue.

In the conference call, founder and CEO Marc Benioff said that Salesforce had gone through previous cycles, so knows what to expect. Specifically, he remarked that"sales cycles can get stretched, deals are inspected by higher levels of management, and all of this we began to start to see in July. Nearly everyone I've talked to is taking a more measured approach to their business. We expect these trends to continue in the near term, and we've reflected this in our guidance."

The company said that most weaknesses was from its smaller and medium-sized businesses in North America and Europe. Service subscription and support revenue came in at $1.83 billion, a 14% gain from last year. Sales Cloud revenue was up 15%, while its Platform & Other Category division generated $1.5 billion in revenue, a 53% increase.