Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : EARNINGS REPORTING - surprises, misses & more -- Ignore unavailable to you. Want to Upgrade?

To: 2MAR$ who wrote (569)	4/19/2001 6:36:34 AM
From: 2MAR$	Read Replies (1) \| Respond to of 762

SAP shrugs off software gloom as Q1 beats forecasts (UPDATE: Adds upgrade, analyst quotes, detail, updates share price) By James Mackenzie FRANKFURT, April 19 (Reuters) - Europe's biggest software group SAP AG on Thursday posted better-than-expected first quarter results, shrugging off the gloom weighing on its U.S. rivals with an upbeat outlook for the next two quarters. ADVERTISEMENT ``Despite the difficult market environment, SAP is optimistic about the first three quarters of 2001,'' it said in a statement. A doubling in net profit combined with a 29 percent rise in sales and the upbeat outlook statement sent the share sharply higher and by 0900 GMT, SAP stock was up around six percent at 163.30 euros in a flat European market. Investment bank Morgan Stanley upgraded its rating on SAP to ``outperform'' from ``neutral'' following the results and other analysts were also impressed. ``It was a very strong set of results, pretty much across the board,'' said Merrill Lynch analyst Daud Khan, who rates the stock a medium-term accumulate and long-term buy. Kicking off the reporting season for European software companies, SAP said sales growth in the first nine months would exceed the 23 percent seen in full year 2000. Operating margins would grow by one or two percentage points above the 14 percent seen in the first nine months of 2000. The forecast contrasts strongly with downbeat statements about prospects for the second quarter from Siebel Systems (NasdaqNM:SEBL - news) and i2 Technologies (NasdaqNM:ITWO - news) on Wednesday, two of its U.S. rivals which have been hit by slowing spending by corporate IT departments. ``All their important competitors have revised their outlook for the year, while SAP has more or less extended theirs and said things will continue as they have been,'' Sal Oppenheim analyst Alla Gorelova said. ``When you compare it with the competition, SAP just looks better.'' EARNINGS BEAT EXPECTATIONS SAP posted an 82 percent rise in operating profit before charges for its staff benefits programmes to 233 million euros ($204.6 million). The rise, following a strong fourth quarter, came on top of a weak first quarter last year but the result was still well ahead of analysts' expectations of about 152 million euros. Net profit more than doubled to 117 million euros, while earnings per share rose to 0.36 euros from 0.18 euros, compared with analysts' forecasts of 0.25 euros. Sales were up 29 percent at 1.52 billion euros, also ahead of expections. A Reuters poll of 16 analysts showed forecasts for first quarter sales ranging between 1.293 billion and 1.48 billion euros at an average of 1.426 billion. SLOWDOWN FEARS Analysts had been awaiting SAP's outlook with more than the usual interest amid signs that the slowdown in software spending which has hit U.S. companies may be crossing the Atlantic. Most of SAP's main U.S. rivals in the web-based business-to-business segment, including Oracle Corp (NasdaqNM:ORCL - news), Ariba Inc (NasdaqNM:ARBA - news) and i2 Technologies have warned results were being hit by faltering economic growth in the United States. SAP's own U.S. business grew slightly more slowly than in the European region and was boosted by exchange rate effects. Sales in the American region rose 26 percent to 550 million euros, compared with a 31 percent rise to 796 million euros in Europe, the Middle East and Africa. Excluding exchange rate effects, American sales were up 20 percent. New licence sales rose by 24 percent to 458 million euros, again beating analysts' forecasts, which predicted licence sales of about 439.5 million euros. SAP also stood apart from U.S. rivals like Siebel and Ariba, which have announced major job losses, saying it had taken on 1,000 new staff since the beginning of the year. Email this story - Most-emailed articles - Most-viewed articles