Although its revenue and income both rose, SAP failed to meet analyst expectations for its first quarter financial report. The enterprise software firm did perform better than its rivals, particularly Oracle.
Reuters reported, “German business software maker SAP on Friday published lower-than-expected first-quarter operating profit and revenue as its activities in Asia showed a decline in revenues. First-quarter operating profit excluding special items rose 8 percent to 901 million euros ($1.2 billion), missing average analyst expectations of 968 million euros. Revenues were also up 8 percent at 3.64 billion euros, but missed even the most pessimistic estimate in a Reuters poll, with individual estimates ranging from 3.73-3.9 billion euros.”
The Wall Street Journal’s Friedrich Geiger observed, “SAP AG, the world’s third-largest software maker by sales, continued to outperform its business-software peers Friday as flourishing sales of database and web-based applications pulled profits higher. The company, based in Walldorf, Germany, outshone main rival Oracle Corp., posting a 17% rise in net profit to €520 million ($678.7 million) and a 7% increase in revenue. Oracle’s net profit, in contrast, was flat in the December-to-February quarter as revenue declined slightly… ‘We gained significant market share, in particular from our primary competitor, but also, I’d say, from most of our competitors,’ said Jim Hagemann Snabe, SAP Co-Chief Executive.”
CRN quoted Co-CEO Bill McDermott, who said, “Our solid growth was primarily driven by stronger-than-expected growth in HANA and cloud revenues.”
Bloomberg’s Cornelius Rahn added, “SAP AG (SAP), the largest maker of business-management software, projected a difficult market for its government business amid cuts in U.S. federal spending and China’s transition to a new leadership. ‘It’s going to be choppy out there in the public sector,’ co-Chief Executive Officer Bill McDermott said in a telephone interview today. ‘Chinese purchasing patterns have definitely slowed down.'”