SAP AG (SAP: Quote) Tuesday said a significant growth in software revenue boosted its second-quarter profit in an uncertain macro-economic environment. The German business software giant experienced double-digit growth in all regions as the demand for SAP's new innovation categories continued to accelerate.
Looking ahead, SAP's CFO Werner Brandt said the company is on track to deliver on targets for the full-year 2012 in line with its 2015 goals, based on the ongoing software momentum.
As announced on July 12, software revenue climbed 26 percent in the quarter to exceed 1 billion mark, reaching the upper end of guidance range. Support revenues also went up 16 percent to 2.01 billion euros.
SAP saw significant traction in strategic industries with financial services and retail both growing more than 60 percent in software revenue. Sap also recorded solid growth across the manufacturing sectors.
During the period, the company experienced strong growth momentum from key innovations. SAP HANA contributed 85 million euros putting the company on track to meet full-year expectations of at least 320 million euros. Cloud generated 69 million euros in revenues. With mobile revenue of 54 million euros, SAP is on track to meet full-year expectations of 220 million euros.
For the second quarter, profit attributable to owners of parent increased 13 percent to 661 million euros and earnings per share grew 12 percent to 0.55 euros. Non-IFRS profit, which excluded certain items, climbed 18 percent to 831 million euros and earnings per share grew 19 percent to 0.70 euros.
Total revenues went up 18 percent to 3.90 billion euros. At constant currencies, revenues grew 12 percent.
Germany generated a 4 percent increase in revenues, while all other regions posted revenue growth in strong double-digit rates.
In the quarter, software and software-related service revenue increased 21 percent and professional services and other service revenue grew 7 percent.
Adjusted operating profit for the period climbed 15 percent, while margin fell 0.8 percentage points to 30 percent, hurt by higher severance expenses and the acquisition of SuccessFactors, that impacted the margin by approximately 100 basis points.
For fiscal 2012, the company continues to expect adjusted software and software-related service revenue to increase in the range of 10 percent - 12 percent at constant currencies, including up to 2 percentage points growth from SuccessFactors' business. Adjusted operating profit is still expected to be in a range of 5.05 billion euros to 5.25 billion euros at constant currencies.
In the year 2011, software and software-related service revenue were 11.35 billion euros and adjusted operating profit was 4.71 billion euros.
Regarding its ongoing TomorrowNow litigation, the company said the retrial date has been rescheduled to August 27 from previous June 18 due to a scheduling conflict affecting Oracle's legal team.
Sap shares are currently trading at 49.21 euros, up 0.15 euros or 0.31 percent on Frankfurt's Xetra.
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by RTT Staff Writer
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