SAP SAP SE

By Patrick Costello

Share of SAP SE (SAP.XE) fell in early trading Thursday after the German enterprise software company disappointed with its second-quarter operating profit and margin results.

The company booked a non-IFRS operating profit of 1.82 billion euros ($2.04 billion) for the second quarter, falling short of analyst expectations of EUR1.87 billion.

SAP's non-IFRS operating margin was stable on year at 27.3%, below a forecast by analysts of 27.7%, according to Vara Research. The company said in April that it would aim to increase this metric by one percentage point per year on average through 2023.

On a non-IFRS, constant currency basis, SAP's cloud-service revenue was up 35% on year, while software license revenue had fallen 6% due to trade-related macro uncertainties, particularly in Asia, it said.

At 0841 GMT, SAP traded down 6% at EUR112.82 after falling more than 10% earlier.

Analysts at Citi said they expected shares to fall given that its results--and new cloud bookings in particular--were underwhelming.

"[SAP's] 2Q 2019 operating margin of 27.3% will likely disappoint," Citi said. "Light margins is not what investors had hoped for."

DZ Bank said it remained positive on SAP, adding that its confirmation of its outlook through 2023 was good news. Still, some investors had expected the company to lift its outlook for 2019 again, it added.

Write to Patrick Costello at patrick.costello@dowjones.com.

(END) Dow Jones Newswires

July 18, 2019 05:09 ET (09:09 GMT)

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