Cost-cutting pulled the enterprise business applications developer out of the red, and CEO Henning Kagermann said he expects the market to remain challenging for the rest of the year. The company has refused to make a revenue forecast.
In its second quarter to June 30, net income was 219m euros ($245.3m), up from a loss of 232m euros ($259.8m) on revenue 7.9% lower at 1.6bn euros ($1.8bn). At the mid-term stage, net income was 405m euros ($453.6m) on revenue 8.1% lower at 3.2bn euros ($3.5bn).
Software revenue dropped 13% in the second quarter to 431m euros ($482.7m), while analysts had been looking for a figure around 462m euros ($517.4m). The decline has been exaggerated by the strength of the euro but even on a common currency basis there was a decline of 5% in the first half.
SAP is having to work a lot harder to keep revenue up. Companies are now opting for smaller packages that offer rapid return on investment, and in the second quarter deals worth 1m euros ($1.1m) or less accounted for 44% of SAP’s licenses, up from 33% in the year-ago period.
SAP said its five largest rivals are i2 Technologies, JD Edwards, Oracle, PeopleSoft and Siebel Systems. It said that when their software sales are added to its own, it had a 55% worldwide market share at the end of the second quarter, compared with 45% a year earlier.
Although the payroll rise 307 to 28,961 in the quarter, SAP said it will be able to increase its operating margin in the rest of the year and is sticking to its forecast that earnings per share before special charges will be in the range of 3.45 to 3.60 euros ($3.9 to $4) a share.
While battered worldwide, SAP said that while revenue in the Americas fell 15% in the second quarter to 506m euros ($566.7m), on a constant currency basis revenue rose by 6% as it continued to outperform its US-based competitors.
Source: Computerwire
