SAP earnings fall short of expectations

Tue Jan 15, 2013 12:31pm EST
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By Harro Ten Wolde

FRANKFURT (Reuters) - Quarterly earnings from SAP AG fell short of expectations on Tuesday, showing the German business software maker failed to keep up with arch-rival Oracle Corp and sending its shares sharply lower.

SAP's results, released more than a week before they had been scheduled, showed group revenue rose 12 percent to 5.06 billion euros ($6.8 billion), below an average analyst forecast of 5.17 billion, according to Reuters data.

Operating profit rose more slowly than revenue, gaining 10 percent to 1.96 billion euros, resulting in SAP's operating margin narrowing by 0.8 percentage points to 38.8 percent in the three months through December.

The figures contrasted with those of Oracle, the world's No. 3 software maker and SAP's biggest competitor, which last month forecast strong sales for 2013 after posting a 17 percent jump in quarterly software revenue.

SAP shares were down 3.8 percent and were the biggest decliners in a 2 percent weaker sector index by 1500 GMT. The stock fell as low as 57.77 euros, its lowest in two months.

"Especially after their main competitor Oracle managed to beat estimates last month, many had hoped that SAP would follow suit," said Markus Huber, head of German trading at ETX Capital.

"Even by missing estimates by a very small margin, and despite having had an overall excellent 2012, investors are venting their disappointment by dumping the stock heavily," Huber added.


Logo of German company SAP is pictured at the CeBit computer fair in Hanover, March, 6, 2012. The biggest fair of its kind will run to March 10, 2012. REUTERS/Fabian Bimmer