SAP Second-Quarter Software License Sales Beat Analyst Estimates

SAP AG (SAP), the biggest maker of
business-management software, reported second-quarter software
license revenue that topped analysts’ estimates, sending the
shares as much as 9 percent higher intraday.

Sales of new software licenses, an indicator of future
revenue, increased 19 percent to 1.06 billion euros ($1.3
billion) excluding currency swings, Walldorf, Germany-based SAP
said today. Analysts had predicted 977 million euros in sales.
The company had projected 15 percent to 20 percent growth.

Revenue was boosted by new products including the rapid
database software Hana, applications for mobile devices and
programs that can be accessed via the Web. Co-Chief Executive
Officers Bill McDermott and Jim Hagemann Snabe stepped up the
pace of acquisitions in the quarter, adding Ariba Inc. (ARBA) for $4.3
billion to bolster SAP’s position in Web-based software and
supply-chain applications and get ahead of archrival Oracle
Corp. (ORCL)

“That was really not expected given the dark mood in the
sector” after other software makers missed estimates, said
Richard Nguyen, a Paris-based analyst at Societe Generale who
recommends buying SAP stock. “People had even speculated a
guidance cut was in the works — until now.”

Swiss Software

Temenos Group AG (TEMN), the Swiss maker of banking software, cut
its revenue forecast late yesterday and said its chief executive
officer would step down, sending the shares down as much as 26
percent today.

Informatica Corp. (INFA), a U.S. supplier of data-integration
software, last week reported a surprise drop in quarterly sales
and profit, citing a downturn in demand, especially in Europe.
Infosys Ltd. (INFY), India’s second-largest software exporter, today
cut its sales forecast after earnings missed estimates.

SAP, which fell as much as 3.5 percent before the release,
jumped as much as 5.8 percent to 48.95 euros. The stock was up
2.5 percent at 47.42 euros as of 4:40 p.m. in Frankfurt, valuing
the company at 58.1 billion euros.

The German software maker today also appointed Luisa
Deplazes Delgado as its new personnel chief and member of the
executive board. She’s currenly the CEO of Procter Gamble
Co.’s Nordic region and will start her role at SAP in September.

Forecasts Confirmed

Operating profit, based on non-IFRS accounting rules that
the company uses for internal projections, rose 15 percent to
1.17 billion euros, in line with analyst estimates. SAP plans to
release detailed earnings July 24.

SAP is betting on its new product categories to help exceed
20 billion euros in revenue by 2015, compared with 14.2 billion
euros last year. The company announced new contracts with
customers including Aareal Bank AG (ARL), McLaren Group and Cabela’s
Inc. (CAB)
during the quarter.

SAP didn’t address its full-year forecast in its statement
today. In January, it predicted non-IFRS operating profit to
reach 5.05 billion euros to 5.25 billion euros and non-IFRS
software and related service revenue to grow 10 percent to 12
percent. Both predictions assume constant currencies and include
the acquisition of SuccessFactors Inc., which was completed
earlier this year.

Redwood City, California-based Oracle beat estimates for
the three months through May with a 6.7 percent gain in license
sales after winning cloud-computing deals.

To contact the reporter on this story:
Cornelius Rahn in Frankfurt at
crahn2@bloomberg.net

To contact the editor responsible for this story:
Kenneth Wong at
kwong11@bloomberg.net


Enlarge image
SAP AG Co-CEOs Bill McDermott and Jim Hagemann Snabe

SAP AG Co-CEOs Bill McDermott and Jim Hagemann Snabe

SAP AG Co-CEOs Bill McDermott and Jim Hagemann Snabe

Hannelore Foerster/Bloomberg

SAP AG Co-Chief Executive Officers Bill McDermott and Jim Hagemann Snabe stepped up the pace of acquisitions in the quarter, adding Ariba Inc. for $4.3 billion in May to bolster SAP’s position in Web-based software and supply-chain applications.

SAP AG Co-Chief Executive Officers Bill McDermott and Jim Hagemann Snabe stepped up the pace of acquisitions in the quarter, adding Ariba Inc. for $4.3 billion in May to bolster SAP’s position in Web-based software and supply-chain applications. Photographer: Hannelore Foerster/Bloomberg

Article source: http://www.bloomberg.com/news/2012-07-12/sap-second-quarter-software-license-sales-beat-analyst-estimates.html

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