Too many software bought on the Internet, Sap launches a profit warning – Milano Finanza

The big German software, Sap, size estimates of operating income for the year-end, thanks to the growing trend for companies to procure software on the internet rather than buying the physical products. Now for the end of this exercise Sap expects an operating profit, excluding the non-recurring charges, between 5.6 and 5.8 billion euro against 5.8000000000-6000000000 initially planned. The management has instead confirmed its outlook on revenues.

In the third quarter, net income amounted to 881 million, an increase of 16% compared to the same period last year, while revenues in growth of 5% to 4.25 billion. Operating profit for the period, net of extraordinary items, increased by 5% to 1.36 billion euro. The result is slightly lower than the consensus of analysts pointed to 1.37 billion euro.

Thanks to the robustness of cloud-based business (revenues from subscriptions and assistance in the sector rebounded by 41% in the quarter), the German enterprise software giant raised its estimates of revenues this year to the division from 1 to 1.05 in 1.04000000000 to 1.07000000000 euro.

The managers of the company have therefore clarified that the increase in sales of “cloud software”, which today account for about a third of the revenue generated by the business classic physical commodity, will reduce the profit of the current year; but the same sales will boost revenues and profits in the coming quarters. Sales of physical products will be billed immediately while the orders of “cloud software” are registered progressively over the years.

“The multinational SAP customers such as Coca-Cola, McDonald’s and Vodafone are moving toward cloud computing because there are no input costs for software licenses, dedicated hardware or installation, and this allows you to answer more flexibly to changes in market demand, “he concluded then that the management does not plan to reduce its presence in the cloud. “ In the long run this is a business more Healthy , “said the board member Bernd Leukert.

The Sap bought last month for $ 8.3 billion Concur Technologies, which produces software for both the management of the expenditure is for travel companies. This has made SAP the second largest company by revenue behind cloud services companies such as Salesforce.com. Despite having paid a high price, Concur could drive up revenues clpud of Sap of over 2 billion euro next year, according to analysts at JP Morgan.

However, in the wake of a profit warning announced in conjunction with the publication of the results of the third quarter, the Frankfurt Stock Exchange under the Sap today gives 4.29% to 51.69 euro. Analysts Websim-Intermonte show that from the beginning of the year underperformance of the title Sap the Frankfurt Stock Exchange was higher than the market (-17% vs. -8% of Dax.)

In 2013, the performance was unremarkable (+ 2.8%) and the entry in the stock market in 2008, the share price has risen from 21 euro to a maximum of € 65 to March 52 2013 With the collapse of the euro is the new band of support moves to 48-44 euro.