SHARE

SAP Reports Strong Software Sales, But Profits Disappoint

Enterprise software giant SAP has released preliminary financial results for the fourth quarter of 2011. Although the firm reported strong sales, its earnings failed to meet analyst expectations, sending the company’s stock lower. Eric Savitz from Forbes reported, “Shares of the German IT software giant SAP are trading lower Tuesday morning after the company disclosed […]

Written By

CH

Cynthia Harvey

Jan 15, 2013

Datamation content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More

Enterprise software giant SAP has released preliminary financial results for the fourth quarter of 2011. Although the firm reported strong sales, its earnings failed to meet analyst expectations, sending the company’s stock lower.

Eric Savitz from Forbes reported, “Shares of the German IT software giant SAP are trading lower Tuesday morning after the company disclosed preliminary results for the fourth quarter that disappointed the Street. The miss, coming just ahead of Q4 earnings season, is going to raise some new questions about the strength of corporate IT spending. The company said in a statement that it had ‘strong overall growth in the quarter.’ For the quarter, total revenue on a non-IFRS basis was 5.06 billion Euros, up 12% from a year ago, or 11% in constant currency. Street consensus was for 5.12 billion.”

Bloomberg BusinessWeek’s Cornelius Rahn added, “SAP AG (SAP), the biggest maker of business-management software, fell the most since 2011 after reporting earnings that trailed analysts’ estimates because of rising spending and slowing growth in the Americas. Fourth-quarter operating profit excluding some items rose about 10 percent to 1.96 billion euros ($2.61 billion), the Walldorf, Germany-based company said today. Analysts projected 2 billion euros, the average of estimates compiled by Bloomberg. Sales of new software licenses, an indicator of future revenue, also trailed projections.”

Chris Bryant with the Financial Times noted, “Still, Bill McDermott and Jim Hagemann Snabe, co-chief executives, hailed an ‘outstanding’ year and said SAP was the fastest growing in the next generation database market. Indeed, SAP’s rapid growth in 2012 was helped by €390m in sales of Hana, a database platform that allows companies to process vast quantities of data at rapid speed.”

Computerworld’s Chris Kanaracus wrote, “SAP’s revenue from software and software-related services showed ample growth thanks in part to its HANA in-memory database and to strength in its portfolio of cloud applications, the company said Tuesday as it reported preliminary numbers for the quarter and year ended Dec. 31. The company achieved a ‘breakthrough in the cloud’ and ‘overachieved’ on its SAP HANA revenue ambition, co-CEOs Jim Hagemann Snabe and Bill McDermott said in a statement.”