SAP withholds outlook as profits fall
Published: 29 Oct 2008 07:30 GMT
SAP reported its third-quarter results on Tuesday, posting a five percent decline in earnings and withholding its revenue forecast for the year due to the uncertainty of the economic climate.
The German enterprise-software maker, which reported its results prior to the market opening, saw its shares fall slightly as the morning progressed, falling to $30.02 (£19.25) a share, down less than one percent in intra-day trading.
The company reported revenues of €2.76bn (£2.21bn), up 14 percent over the same period last year. Prior to issuing its third-quarter warning earlier this month, Wall Street had expected SAP to post revenues of €2.86bn.
Sales of SAP's software and software-related services rose to €1.99bn in the third quarter, up 15 percent over last year. Revenues of software not tied to SAP services climbed to €763m, a seven percent increase. But the company's net income fell to €388m, or 35 cents a share, in the third quarter, down from €408m a year ago.
The company, which recently dealt investors a blow when it issued its third-quarter warning and reduced its revenue forecast for the quarter, offered no reassurances to shareholders in this latest report, withholding its revenue forecast for the year.
In a statement, SAP said: "In light of the uncertainties surrounding the current economic and business environment, the company decided to no longer provide a specific outlook for non-GAAP [Generally Accepted Accounting Principles] software and software-related service revenues for the full year 2008."
The statement continues: "However, with recent cost-savings initiatives in place, the company expects the full-year 2008 non-GAAP operating margin, which excludes a non-recurring deferred support revenue writedown of €180m from the acquisition of Business Objects and acquisition-related charges, to be around 28 percent, at constant currencies, if the company can increase non-GAAP software and software-related service revenues, excluding a non-recurring deferred support revenue writedown from the acquisition of Business Objects, in a range between 20 percent and 22 percent, at constant currencies for the full year 2008."
SAP's current woes began in the second half of September, with the speed and depth of the cutback in customer orders taking the technology titan taken by surprise.
Oracle, SAP's main rival, edged up in morning trading to $15.88 a share, gaining less than one percent during intra-day trading.
Credit: As SAP profits fall, revenue outlook yanked from CNET News
Did you find this article useful?
2 out of 3 people found this useful
Digg
Slashdot
Del.ici.ous
Stumble
Reddit
