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Thứ Hai, 21 tháng 7, 2014

SAP Investors Shrug Off Profit Decline - Wall Street Journal

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Updated July 17, 2014 6:22 a.m. ET




An exterior view of the headquarters of German software giant SAP in Walldorf, Germany. SAP's shares rose Thursday despite a fall in earnings. European Pressphoto Agency



FRANKFURT—Shares in SAP SAP.XE -0.30% SAP SE Germany: Xetra 60.02 -0.18 -0.30% July 21, 2014 5:35 pm Volume (Delayed 15m) : 3.01M P/E Ratio 22.48 Market Cap €73.96 Billion Dividend Yield 1.67% Rev. per Employee €255,378 07/17/14 Corrections & Amplifications 07/17/14 CIOs See Great Risk in Moving ... 07/17/14 SAP Investors Shrug Off Profit... More quote details and news » SAP.XE in Your Value Your Change Short position SE jumped as much as 5% on Thursday after the software company said revenue from cloud applications rose rapidly in the second quarter, despite reporting a drop in profit.


The German company—which supplies businesses with applications for processes such as accounting and managing customer relations—reported a 23% fall in net profit from a year earlier to €557 million ($753 million), after it booked €289 million in provisions for a patent litigation with Versata Software Inc. Second-quarter revenue increased 2.2% to €4.15 billion.


But investors focused on revenue generated from SAP's cloud-based products, which jumped 52% to €241 million. Management raised its forecast for full-year cloud revenue by €50 million to between €1 billion and €1.05 billion, in part because of the recent acquisition of Fieldglass, a maker of workforce management cloud software.


Cloud-based products offer huge revenue potential for SAP, as the company's clients replace on-site software on computers with cloud applications to take advantage of lower maintenance costs.


SAP's cloud business will be at least as profitable as Europe's largest software maker as a whole, said Chief Executive Bill McDermott. The company is targeting an operating margin of 35% by 2017 after reaching almost 33% last year.


"Over time, you'll have a just-as-good margin in the cloud, if not better," said Mr. McDermott.


But SAP faces challenges from competing vendors of cloud applications, such as Salesforce.com Inc. CRM -0.34% Salesforce.com Inc. U.S.: NYSE $53.32 -0.18 -0.34% July 21, 2014 4:00 pm Volume (Delayed 15m) : 2.65M AFTER HOURS $53.32 0.00 0.00% July 21, 2014 7:43 pm Volume (Delayed 15m): 11,493 P/E Ratio N/A Market Cap $32.85 Billion Dividend Yield N/A Rev. per Employee $331,214 07/16/14 Why Big Companies Delay Using ... 07/16/14 IBM, Apple Want Consumer Apps ... 07/11/14 Salesforce.com Agrees to Acqui... More quote details and news » CRM in Your Value Your Change Short position and NetSuite Inc. SAP's main rival, Oracle, ORCL +0.03% Oracle Corp. U.S.: NYSE $40.01 +0.01 +0.03% July 21, 2014 4:00 pm Volume (Delayed 15m) : 15.77M AFTER HOURS $40.01 0.00 0.00% July 21, 2014 5:17 pm Volume (Delayed 15m): 95,047 P/E Ratio 16.53 Market Cap $178.20 Billion Dividend Yield 1.20% Rev. per Employee $313,729 07/17/14 Corrections & Amplifications 07/17/14 CIOs See Great Risk in Moving ... 07/17/14 The Morning Download: Companie... More quote details and news » ORCL in Your Value Your Change Short position is also targeting growth in the cloud sector, but last month reported a fall in fourth-quarter profit.


Société Générale analyst Richard Nguyen said the big surprise was that SAP's cloud revenue grew much more rapidly than that of Oracle and Salesforce, which reported 25% and 36% respective increases in their latest quarters.






WSJD is the Journal's home for tech news, analysis and product reviews.



At 1015 GMT, SAP shares were trading 3.9% higher at €60.25.


SAP said its operating-profit forecast for the year of €5.8 billion to €6 billion now excludes expenses related to litigation with Versata. The guidance is adjusted for currency effects and based on SAP's own accounting method. If exchange rates remain at the June level, they will diminish operating profit growth by two percentage points.


Mr. McDermott has been SAP's sole CEO since May, when his former co-chief, Jim Hagemann Snabe, moved to the supervisory board. The sole leadership has helped SAP move faster, he said.


"You have to move fast because markets are nimble," he said.


Mr. McDermott last week relocated to a new home in Heidelberg, near SAP's headquarters in Walldorf. He used to work at SAP's U.S. headquarters near Philadelphia.


"I have a little house stuck in the rock," he said, from which he can see Heidelberg's famous castle.


Write to Friedrich Geiger at friedrich.geiger@wsj.com







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