Re: SAP profits.
Hi Seamus!
Perhaps not a bottom buy quite yet:
Germany's SAP plummets on profit fears
By Gareth Vaughan, CBS MarketWatch
Last Update: 8:39 AM ET Mar 10, 1999
LONDON (CBS.MW) -- Shares in the German IT giant SAP AG plunged as much as 8.2 percent Wednesday after the company apparently told analysts in New York Tuesday night that it sees no improvement in its 1999 first half profits from 1998's level.
"There was an SAP presentation to analysts in New York last night and they said they see no improvement in their profits for the first half of 1999 versus first half 1998," said Steven Reynolds, London-based technology and telecoms trader at Merrill Lynch.
SAP shares fell 8.2 percent to 281 euros, their lowest level in a year. The share plunge accounted for one-third of the benchmark Dax's 1.2 percent fall.
An SAP spokesman in Germany confirmed that a meeting with analysts did take place in New York Tuesday, but he declined to say what had been discussed.
"We stick to our forecast for the full 1999 year. We see sales growth of 20-25 percent [from 8.5 billion deutsche marks ($4.76 billion)] and improvement in the pretax profit rate of up to 1 percent [from 1.9 billion deutsche marks ($1.06 billion) in 1998]," the SAP spokesman said.
Bad timing
The earnings forecast comes at a bad time for SAP. On March 4 the company's U.S. vice president Jeremy Coote defected to rival Siebel Systems Inc. (SIE). "Siebel is an absolutely fantastic business. They're growing like an express train," said Peter Wyatt, London-based IT analyst at Credit Lyonnais.
SAP, however, has been having a tougher time. Wyatt said the company's share value has plummeted 50 percent over the last year. A number of deferred orders in Japan have also hit the company's Asian operations.
"A year and a half ago analysts were saying people were buying SAP systems to sort out the millennium problem, but now sales are slowing as the year 2000 approaches," said Wyatt.
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So, why did they decline to share their discussion with the rest of the world?
Best wishes,
Tom |
