SAP Strikes Back with Strong Earnings
Thursday July 19 01:14 PM EDT
By Larry Seben, www.CRMDaily.com
Bucking the lower earnings trend and offering a ray of hope to technology investors, SAP AG (NYSE: SAP - news) had some positive news for the market. The company announced second-quarter revenue rose 24 percent over the year-ago quarter, while operating income before charges for stock-based compensation programs jumped 72 percent, from 246 million euros (US$214 million) to 424 million euros.
That rise in operating income resulted in a 75.6 percent increase in net earnings, from .37 euros per share in 2000 to .65 euros per share this year, SAP reported.
The revenue and earnings boost came despite modest growth in SAP's American market operations, which rose just 12 percent, from 598 million euros to 671 million euros. SAP benefited from the difference in currency rates: Without currency differences, revenue in the Americas would have risen an even more modest 6 percent.
Getting Stronger
"While there was a slight decline in American license revenues, we are gaining overall market share versus the competition and doing quite well despite the conditions," said Henning Kagermann, co-chairman of SAP.
"We have increased our sales momentum and kept control of costs," added company co-chairman Hasso Plattner.
Strategically Positioned
According to company officials, the overall results reflect the long-term strategy the company adopted and continues to pursue, particularly in the CRM market, where company officials said they have seen increasing momentum.
"We are strategically well positioned with a complete product line focused on what has become a world of portals and exchanges," Plattner said.
"This is a momentum game, and we have been building momentum," he added. "In a market like this, the big fish will do better."
Upbeat Outlook
SAP also offered a generally upbeat outlook for the balance of the year. In contrast to competitor Siebel Systems (Nasdaq: SEBL - news), which said the remainder of 2001 will be "tough," SAP officials said they expect their company to grow and gain market share.
"We feel confident we can continue through the year and will get stronger," said Kagermann.
For the full year, officials said they anticipate revenue will rise more than 20 percent over the prior year, while operating margins should improve 1 to 2 percent over 2000, exceeding 20 percent.
The combination of strong past quarterly results, a generally optimistic outlook and strong earnings reported by wireless giant Nokia (news - web sites) (NYSE: NOK - news) have given the markets an overall boost and -- at least for now -- have given investors something to smile about. |
