SAP Shares Jump After 2Q Profit, Revenue Beat Consensus Estimates
July 09 2020 - 4:16AM
Dow Jones News
By Mauro Orru
SAP SE's shares jumped Thursday after the company reported
better-than-expected preliminary figures for the second
quarter.
The German software company said late Wednesday that non-IFRS
operating profit for the second quarter rose 8% to 1.96 billion
euros ($2.22 billion), with an operating margin of 29.1%.
At 0742 GMT, SAP shares traded 6.8% higher at EUR137.50, making
it the top performer in Germany's DAX index. The shares are up 14%
in 2020 to-date.
Analysts at U.S. bank Citi said SAP's operating margin was well
ahead of Citi's estimated 26.3% and consensus projections of 27.5%,
due to slower hiring, lower discretionary spending and events costs
which also affected other companies as a result of the coronavirus
pandemic.
SAP reported a 1% rise in non-IFRS total revenue to EUR6.74
billion, with software licenses revenue down 18% to EUR770 million
and cloud revenue up 19% to EUR2.04 billion.
Analysts at U.S. bank Jefferies said revenue came in higher than
consensus estimates of EUR6.5 billion, as did software licenses
revenue against projections of EUR570 million.
SAP also reiterated its outlook for 2020, expecting operating
profit to be in a range of EUR8.1 billion to EUR8.7 billion at
constant currencies, and total revenue in a range of EUR27.8
billion to EUR28.5 billion at constant currencies.
"With SAP's 2Q revenue and operating profit ahead of Street
estimates, the bar for achieving its 2020 guidance has effectively
been lowered," Jefferies analysts said, adding that "2020 guidance
implies a gradually improving demand environment throughout the
year, which we view as achievable by the company."
Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94
(END) Dow Jones Newswires
July 09, 2020 04:01 ET (08:01 GMT)
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