Software Maker SAP's Profit and Sales Declined
October 25 2020 - 5:48PM
Dow Jones News
By William Boston
BERLIN -- SAP SE, the business-software maker, on Sunday said
profit and sales declined in the three months through Sept. 30, as
the economic fallout of the global response to the coronavirus
pandemic hit core business units.
The Walldorf, Germany-based software maker said total revenue
fell 4% to EUR6.54 billion, equivalent to $7.76 billion, in the
third quarter, and operating profit slipped 1% to EUR2.07 billion.
Cloud revenue rose 10% to EUR1.98 billion, and revenue from
software and cloud services combined fell 2% to EUR5.5 billion.
As the pandemic continues to weigh on the economy and the threat
of new lockdowns arises during a resurgence of Covid-19 infections,
business customers are becoming more cautious about spending and
investment, affecting core business units, SAP said.
"Lockdowns have been reintroduced in some regions, recovery is
uneven and companies are facing more business uncertainty," SAP
said. "Consequently, there is greater scrutiny of larger projects.
Transactional revenue continues to be impacted, especially in SAP
Concur where business travel-related revenues have yet to see a
meaningful recovery."
As a result of the weaker business in the third quarter and
uncertainty from the pandemic, SAP cut its outlook on earnings and
revenue for the full year.
SAP said it now expects adjusted operating profit of up to
EUR8.5 billion, down from a previous estimate of up to EUR8.7
billion. The company cut its revenue forecast to up to EUR27.8
billion, down from a previous forecast of up to EUR28.5
billion.
Write to William Boston at william.boston@wsj.com
(END) Dow Jones Newswires
October 25, 2020 17:33 ET (21:33 GMT)
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