SAP sets back medium-term profitability targets
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SAP, the world's leading maker of business software, may need an extra year to achieve its medium-term profit target of an operating margin of 30 percent, its chief financial officer said.
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Business software maker SAP, which employs 450 people in Dublin and Galway, has said that a strong performance in its European activities helped boost earnings in the third quarter, which came out higher than analysts&#39; expectations.
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Business Objects reported a 19 percent rise in revenue for the third quarter, driven by services, but earnings were dragged down by a shortfall in license revenue, recent acquisitions and legal costs.While the income figures are broadly in line with preliminary results announced on Oct. 7, the company had expected its earnings to be better. The results come about two weeks after&#160;SAP announced plans to acquire Business Objects&#160;for $6.7 billion.Earnings for the quarter fell to $6.4 million, or $0.07 per share, from $19.6 million, or $0.21 per share, a year earlier, Business Objects said. It had predicted earnings of $0.16 to $0.20 per share.The earnings reported include a charge of around $7 million, equivalent to $0.05 per share, to settle litigation with Decision Warehouse. Business Objects had previously honored Decision Warehouse as its top distributor in Latin America: the company now resells products from&#160;Hyperion, which was recently bought by Oracle, and&#160;BEA Systems, which Oracle is trying to buy.Revenue for the quarter, which ended Sept. 30, was $369 million, up 19 percent compared to a year earlier. The growth was driven by revenue from services such as product maintenance, up 27 percent, and consulting and training, up 34 percent year on year.Growth in license revenue lagged, up just 6 percent compared to a year earlier, although license revenue from all product lines continued to grow, the company said.The&#160;acquisition of Cartesis, completed on June 1, and of&#160;Inxight Software, completed on July 3, added around $21 million in revenue for the quarter.Business Objects also profited from exchange rate fluctuations: while total revenue grew 19 percent year on year, at constant currency rates it grew just 15 percent, while license revenue grew 2 percent at constant currency rates.Business Objects warned that there&#39;s more uncertainty ahead -- and not just because of SAP&#39;s bid for the company, announced Oct. 7.The unexpected shortfall in third-quarter licensing revenue, added to uncertainty about customers&#39; future spending ahead of the merger, prompted the company to withdraw previously issued financial guidance.
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InfoWorld - Following through on&#160;plans to win more midsize businesses as customers, SAP AG has filled several key positions in its newly formed global SME (small and medium-size enterprise) unit.
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It's on track to meet sales targets, but profits might not keep pace.
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SAP aims to have 1,000 customers for its hosted midmarket ERP service, Business ByDesign, before the end of the year. It plans to roll out the service in 20 more countries, including India, in that time.&quot;We will go after the biggest markets first,&quot; said deputy CEO Leo Apotheker. &quot;India is a very important market for a product like&#160;Business ByDesign,&quot; he said.The subscription-based ERP (enterprise resource planning) service launched in September, and is now available in the U.S., France, Germany, the U.K., and China.SAP will launch the service in new countries each quarter. The Indian launch will happen in the second quarter, according to an SAP spokesman.&quot;For the year, we would like to reach 1,000 customers,&quot; said Apotheker. &quot;That&#39;s enough to show we are a true player in this business.&quot;Apotheker declined to say how many seats the 1,000-customer target represents, noting only that Business ByDesign is aimed at customers with between 100 and 700 employees. Business ByDesign costs $149 per user per month in the U.S., with a minimum of 25 users.Business ByDesign is not the only SAP product for small and mid-size companies: there are also Business All-in-One or, for companies with fewer than 100 employees, Business One. Both run on the customer&#39;s own servers.In some regions, the notion of an ERP &quot;service&quot; can be a hard sell for cultural reasons. &quot;China is a market where the pure on-demand model is still viewed with conservatism,&quot; Apotheker said.&quot;Many people have been worried about the potential for cannibalism, but that isn&#39;t happening,&quot; said Apotheker.&quot;Business All in One is very strong, and Business One had a very good year. We grew the number of customers significantly. There are no issues with cannibalization.&quot;With that confidence that it won&#39;t eat its own market share, SAP plans to offer Business ByDesign to smaller subsidiaries of existing Business ByDesign customers, Apotheker said.
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German software maker SAP said a stronger euro significantly slowed the growth of its revenue and profits during the third quarter.
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SAP, the world's leading maker of business software, said a strong performance of its European activities helped boost earnings in the third quarter, which came out higher than analysts' expectations.
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THE REGION Sapient Corp. , a Cambridge business and technology services consultancy, said it swung to a first-quarter profit, topping Wall Street expectations. Net income for the quarter ended March 31 was $775,000, or a penny per share, compared with a loss of $1.4 million, or a penny per share, for the year-earlier quarter. Excluding certain expenses, earnings for the ...
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Shares in SAP, the world&#039;s leading maker of business software, have plummeted after the group said its software licence sales fell well short of expectations in the second quarter.
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Wabash National Corp. is in the process of stabilizing a faulty SAP implementation, which the company blamed for a sharp drop in second-quarter profits.
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Beating analysts&#39; expectations and citing strong performance worldwide, SAP released preliminary fourth-quarter financial results on Monday, showing revenue will be about &#8364;3.25 billion ($4.8 billion), a rise of 10 percent compared to the same period last year.Fourth-quarter software and software-related services revenue will be about &#8364;2.48 billion, an increase of about 13 percent year-over-year, according to SAP.Total revenue for 2007 is expected to grow roughly 9 percent to &#8364;10.26 billion. Full-year 2007 software and software-related service revenue is expected to be about &#8364;7.44 billion, a jump of around 13 percent over 2006.Analysts polled by Thomson First Call had predicted on average that total fourth-quarter revenue would come in at $4.7 billion.Exchange rates took a toll on SAP&#39;s results, for as the dollar weakens against the euro, SAP&#39;s U.S. sales are worth less. At constant currency rates, fourth-quarter software and software-related services revenue growth will be about 17 percent year-over-year and total revenue growth will be 13 percent compared to 2006, SAP said.SAP&#39;s results were driven by performance across all regions, but the company showed particular strength in the Asia-Pacific-Japan market, it said. Fourth-quarter software and software-related service revenue rose about 27 percent there to &#8364;.30 billion and is expected to stand at about &#8364;.96 billion for the year, a rise of about 19 percent.SAP estimated fourth-quarter software and software-related service revenue in the EMEA region will be about &#8364;1.40 billion, a jump of roughly 13 percent and &#8364;3.98 billion for the year, which is also about a 13 percent rise.Growth was slower in the Americas, where software and software-related service revenue rose 7 percent in the fourth quarter to &#8364;.78 billion and is expected to be roughly &#8364;2.5 billion for the year overall, a year-to-year increase of 9 percent, according to SAP.However, SAP expects its operating margin to fall slightly for 2007, to 26.5 percent, compared to 27.3 percent in 2006. It attributed the decline to investments made in its Business ByDesign ERP suite targeted at the mid-market.SAP plans to provide more details on its 2007 earnings on Jan. 30.
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BP Plc  slashed its short and medium term growth targets on Tuesday, hitting the oil giant's shares, as it reported better than expected, but falling, fourth quarter profits.
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Beating analysts&#39; expectations and citing strong performance worldwide, SAP released preliminary fourth-quarter financial results on Monday, showing revenue will be about &#8364;3.25 billion ($4.8 billion), a rise of 10 percent compared to the same period last year.
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Business software maker SAP AG said Thursday that its second-quarter profit grew 8 percent, citing market share gains and strong sales growth in all three major markets &#151; Europe, Asia and the United States.
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(InfoWorld) - SAP has christened itsÂ suite of hosted ERP softwareÂ for the midmarket SAP Business ByDesign and said it will be available initially in the U.S. and Germany, with the U.K., France and China to follow soon after. Pricing for the service in the U.S. starts at $149 per user per month for a minimum of 25 users, including services and support, SAP said. Customers also pay $54 per month for each group of five "efficiency users," or casual users who access the software only to fill out expense reports and purchase confirmations, for example. SAP CEO Henning Kagermann presented the first demonstration of the product, formerly known by its code name A1S, at an event in New York Wednesday morning, calling it "the most important announcement I have made in my career." SAP has said it will invest â¬300 million to â¬400 million (about $400 million to $550 million) by the end of 2008 to support the introduction of the service, including a consumer marketing campaign on the Web to alter the perception of SAP as a provider of software for big businesses. SAP Business ByDesign aims to offer the gamut of ERP (enterprise resource planning) capabilities in a service affordable and simple enough for use by businesses with 100 employees to 500 employees, Kagermann said. The capabilities include manufacturing, purchasing, accounting, sales and marketing and human resources. The software is live today at 20 customers in Germany and the U.S., including a small aircraft manufacturer, a manufacturer of air fresheners, a technology consulting company and a company that offers packaging and distribution services to pharmaceutical companies. It still wasn't entirely clear from SAP's statement when the average business will be able to sign up for the service, but a safe bet for most countries appears to be 2008. SAP is "currently engaging with pilot customers" in the U.S. and Germany and "validating" the product with customers in the U.K., France and China, it said in a statement. Next year it will offer the service in additional markets including Australia and India in the Asia-Pacific; Italy, the Netherlands, the Nordic region and Spain in Europe; Canada and Mexico in the Americas; and South Africa. Other countries will follow in 2009. The company has said it hopes to open a new market for ERP among companies that rely today on spreadsheets and other individual programs to run their businesses, and were put off ERP in the past by its price and complexity. Analysts say the challenge will be to offer a product that's easy for companies to configure but which meets the needs of their individual business.
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Slowing sales and income plus a warning about future profitability at Deluxe shows just how thin the line between deep value and permanent decline can be.