SAP Software License Sales Beat Estimates; Shares Gain

SAP AG (SAP), the biggest maker of business-management software, reported second-quarter software license revenue that topped analysts’ estimates, sending the shares as much as 9 percent higher intraday.

Sales of new software licenses, an indicator of future revenue, increased 19 percent to 1.06 billion euros ($1.3 billion) excluding currency swings, Walldorf, Germany-based SAP said today. Analysts had predicted 977 million euros in sales. The company had projected 15 percent to 20 percent growth.

Revenue was boosted by new products including the rapid database software Hana, applications for mobile devices and programs that can be accessed via the Web. Co-Chief Executive Officers Bill McDermott and Jim Hagemann Snabe stepped up the pace of acquisitions in the quarter, adding Ariba Inc. (ARBA) for $4.3 billion to bolster SAP’s position in Web-based software and supply-chain applications and get ahead of archrival Oracle Corp. (ORCL)

“That was really not expected given the dark mood in the sector” after other software makers missed estimates, said Richard Nguyen, a Paris-based analyst at Societe Generale who recommends buying SAP stock. “People had even speculated a guidance cut was in the works -- until now.”

Swiss Software

Temenos Group AG (TEMN), the Swiss maker of banking software, cut its revenue forecast late yesterday and said its chief executive officer would step down, sending the shares down as much as 26 percent today.

Informatica Corp. (INFA), a U.S. supplier of data-integration software, last week reported a surprise drop in quarterly sales and profit, citing a downturn in demand, especially in Europe. Infosys Ltd. (INFY), India’s second-largest software exporter, today cut its sales forecast after earnings missed estimates.

SAP, which fell as much as 3.5 percent before the release, jumped as much as 5.8 percent to 48.95 euros. The stock was up 2.5 percent at 47.42 euros as of 4:40 p.m. in Frankfurt, valuing the company at 58.1 billion euros.

The German software maker today also appointed Luisa Deplazes Delgado as its new personnel chief and member of the executive board. She’s currenly the CEO of Procter & Gamble Co.’s Nordic region and will start her role at SAP in September.

Forecasts Confirmed

Operating profit, based on non-IFRS accounting rules that the company uses for internal projections, rose 15 percent to 1.17 billion euros, in line with analyst estimates. SAP plans to release detailed earnings July 24.

SAP is betting on its new product categories to help exceed 20 billion euros in revenue by 2015, compared with 14.2 billion euros last year. The company announced new contracts with customers including Aareal Bank AG (ARL), McLaren Group and Cabela’s Inc. (CAB) during the quarter.

SAP didn’t address its full-year forecast in its statement today. In January, it predicted non-IFRS operating profit to reach 5.05 billion euros to 5.25 billion euros and non-IFRS software and related service revenue to grow 10 percent to 12 percent. Both predictions assume constant currencies and include the acquisition of SuccessFactors Inc., which was completed earlier this year.

Redwood City, California-based Oracle beat estimates for the three months through May with a 6.7 percent gain in license sales after winning cloud-computing deals.

To contact the reporter on this story: Cornelius Rahn in Frankfurt at crahn2@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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