SAP Shares Fall on 2Q Results
18 Juli 2019 - 11:24AM
Dow Jones News
By Patrick Costello
Share of SAP SE (SAP.XE) fell in early trading Thursday after
the German enterprise software company disappointed with its
second-quarter operating profit and margin results.
The company booked a non-IFRS operating profit of 1.82 billion
euros ($2.04 billion) for the second quarter, falling short of
analyst expectations of EUR1.87 billion.
SAP's non-IFRS operating margin was stable on year at 27.3%,
below a forecast by analysts of 27.7%, according to Vara Research.
The company said in April that it would aim to increase this metric
by one percentage point per year on average through 2023.
On a non-IFRS, constant currency basis, SAP's cloud-service
revenue was up 35% on year, while software license revenue had
fallen 6% due to trade-related macro uncertainties, particularly in
Asia, it said.
At 0841 GMT, SAP traded down 6% at EUR112.82 after falling more
than 10% earlier.
Analysts at Citi said they expected shares to fall given that
its results--and new cloud bookings in particular--were
underwhelming.
"[SAP's] 2Q 2019 operating margin of 27.3% will likely
disappoint," Citi said. "Light margins is not what investors had
hoped for."
DZ Bank said it remained positive on SAP, adding that its
confirmation of its outlook through 2023 was good news. Still, some
investors had expected the company to lift its outlook for 2019
again, it added.
Write to Patrick Costello at patrick.costello@dowjones.com.
(END) Dow Jones Newswires
July 18, 2019 05:09 ET (09:09 GMT)
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